Cattle feeding margins slip from bad to ugly

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The train wreck for cattle feeders continues. Cattle feeding margins declined $45 per head last week as cash sales dropped another $2.50 per hundredweight, according to the Sterling Beef Profit Tracker. Feedyards are now seeing average per head losses exceed $110.

Beef packers saw their margins decline a modest $2 per head, leaving losses at $16 per head. The Sterling Beef Profit Quotient declined 136 points for the week and the industry profitability index is now negative 356.5, according to estimates developed by Sterling Marketing Inc. Vale, Ore.

Pork producer margins held nearly steady, with margins at a negative $36 per hog marketed, according to the Sterling Pork Profit Tracker. Negotiated cash hog prices declined $1.52 per hundredweight last week to $74.24. Pork packer margins improved $2.15 per head for the week, leaving profits at $6.36 per head.

A year ago cattle feeders sold cash cattle at $125.61 per hundredweight, resulting in profits of $22.93 per head. Last year cash hogs fetched $85.99 per hundredweight, resulting in profits of $11.18 per head.

The Sterling Beef and Pork Profit Trackers are calculated using actual weekly prices for both cattle and hogs, feed costs, beef and pork cutout prices, drop credits and other factors that influence profit margins.

The Sterling Beef Profit Tracker for the week ending Mar. 23:

  • Average feedyard margins: -$116.79 per head.
  • Average packer margins: -$16.68 per head.
  • Sterling Profit Quotient: -356.5.

The Sterling Pork Profit Tracker for the week ending Mar. 22:

  • Average farrow-to-finish margins: -$36.25 per head.
  • Average pork packer margins:  $6.36 per head.

The Sterling Beef and Pork Profit Trackers are produced by Sterling Marketing Inc. and John Nalivka, president, Vale, Ore., and are published weekly by Drovers/CattleNetwork, and PorkNetwork.



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