Cattle feeding losses more than double

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Cattle feeding margins declined more than $66 per head last week, leaving average losses at just over $113 per head, according to the Sterling Beef Profit Tracker.

Beef packers saw their margins improve more than $8 per head on the week leaving losses at more than $74 per head. The Sterling Beef Profit Quotient declined 200 points for the week and the industry profitability index is now negative 360.5, according to estimates developed by Sterling Marketing, Inc., Vale, Ore. A month ago the Sterling Beef Profit Quotient was a negative 288.1.

Pork producer margins improved more than $6 per head last week, with margins now at a negative $35.45 per hog marketed. Negotiated cash hog prices improved $4.53 per hundredweight last week to $86.06. Pork packer margins declined $5.96 per head for the week, creating losses of $2.14 per head, according to the Sterling Pork Profit Tracker.

A year ago cattle feeders sold cash cattle at $119.98 per hundredweight, resulting in losses of $15.39 per head. Last year cash hogs fetched $85.39 per hundredweight, resulting in losses of $4.77 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 Dec. 8:

  • Average feedyard margins: -$113.19 per head.
  • Average packer margins: -$74.33 per head.
  • Sterling Profit Quotient: -360.5.

The Sterling Pork Profit Tracker for the week ending Dec. 7:

  • Average farrow-to-finish margins: -$28.72 per head.  
  • Average pork packer margins: -$2.14 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.



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rick    
December, 11, 2012 at 06:51 PM

The question is, who actually owns the cattle? If the cattle are owned by the feedlot operators or investors then there are real losses but why would anyone invest in cattle when it was obvious months ago what the losses and risks were. On the other hand if the packers own the cattle these are just phatom losses since the packers can simply recover any loss on feeding the more likely prospect.


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