Packer margins shrink again, feeders see more red

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Feedlot margins remain in the red with last week’s averages losing another $24.55 to settle at $148.49 according to the Sterling Profit Tracker. Reduced feed costs that gave feeding margins some relief in the previous week returned to higher levels last week.

While feeder steer prices against last week’s marketing managed to improve by 77 cents to $141.11 per head, the feed costs also moved higher, up $17.37 to $490.98 per head last week. Feed costs were slightly higher compared to a month ago and over $65 more than the same week last year.

Facing higher feed costs, feeder steers against last week’s marketing are $3.28 lower than a month earlier and $14.35 below the previous year’s prices.

Although packers continue to see positive margins, they’re pockets are getting lighter with margins shrinking for three consecutive weeks. After falling $42 per head over the previous two weeks, packer margins were down another $18 last week, averaging $24 per head.

Pork producer margins improved over the previous week as margins gained $2.04 per head to average $17.59, according to the Sterling Profit Tracker. Negotiated cash hog prices improved by $1.34 per hundredweight, but packer margins fell lower, losing $3.54 per head to settle at -$10.36 last week.

The Sterling Beef Profit Tracker for the week ending July 27:

  • Average feedyard margins: -$148.49 per head.
  • Average packer margins: $23.82 per head.

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

  • Average farrow-to-finish margins: $17.59 per head.
  • Average pork packer margins: -$10.36 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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