Feeding margins improve on lower costs, packers comfy

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Closeouts were a little easier to digest last week, but it wasn’t due to higher cattle prices. The improvement to cattle feeding margins was attributable to lower costs – feeder cattle and grain. Those cost declines helped margins improve $63 per head. Still, feedyards lost an average of $124 per head on cattle marketed last week, according to the Sterling Beef Profit Tracker.

Market activity Feed costs calculated against cattle marketed last week was $18.24 less than the previous week, and feeder cattle prices calculated against cattle marketed last week were $5.61 per hundredweight ($43.47 per head) lower than the previous week.

Packers have had two bad weeks in a row, with margins declining $20 per head two weeks ago and another $22 per head last week, according to estimates by Sterling. Packer margins, however, remained $41 per head in the black.

Pork producer margins declined $4.34 per head, with margins now a positive $15.55 per hog marketed, according to the Sterling Pork Profit Tracker. Negotiated cash hog prices declined $1.29per hundredweight last week to $99.74. Pork packer margins declined $4.04 per head for the week, resulting in losses of $6.82 per head.

A year ago cattle feeders sold cash cattle at $113 per hundredweight, resulting in losses of $270.31 per head. Last year cash hogs fetched $95.32 per hundredweight, resulting in profits of $21.94 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 July 20:

  • Average feedyard margins: -$123.94 per head.
  • Average packer margins: $41.77 per head.

The Sterling Pork Profit Tracker for the week ending July 19:

  • Average farrow-to-finish margins: $15.55 per head.
  • Average pork packer margins: -$6.82 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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