Packer margins jump higher, feeding margins bleak

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Profit margins for beef packers improved significantly last week, thanks to higher wholesale beef prices.

Cattle feeding margins improved $9 per head for the week, but average feeding losses still exceed $94 per head, according to the Sterling Beef Profit Tracker. Beef packers saw their margins improve nearly $50 per head, with average profits now exceeding $69 per head. The Sterling Beef Profit Quotient improved 41 points for the week and the industry profitability index is now negative 266.4, according to estimates developed by Sterling Marketing Inc., Vale, Ore.

Pork producer margins declined $1 per head, with margins now a positive $2.54 per hog marketed, according to the Sterling Pork Profit Tracker. Negotiated cash hog prices declined $0.05 per hundredweight last week to $91.36. Pork packer margins improved $7.67 per head for the week, resulting in losses of $6.90 per head.

A year ago cattle feeders sold cash cattle at $122.72 per hundredweight, resulting in losses of $17.40 per head. Last year cash hogs fetched $84.27 per hundredweight, resulting in profits of $7.49 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 May 18:

  • Average feedyard margins: -$94.29 per head.
  • Average packer margins: $69.50 per head.
  • Sterling Profit Quotient: -266.4.

The Sterling Pork Profit Tracker for the week ending May 17:

  • Average farrow-to-finish margins: $2.54 per head.
  • Average pork packer margins: -$6.90 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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