Cattle feeding margins: Can they get any worse?

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In a word, yes. Cash fed cattle prices declined nearly $2 per hundredweight again last week, leaving cattle feeders staring at closeouts showing average losses now exceeding $270 per head. Packer margins remained in the black, but profits declined by more than $6 per head, according to the Sterling Beef Profit Tracker. The Sterling Beef Profit Quotient lost another 84 points on the week, leaving the industry profitability index at a negative 813.4, according to estimates developed by Sterling Marketing, Inc., Vale, Ore.

Pork producer margins slipped nearly $6 per head last week, but profits remain nearly $22 per hog marketed. Negotiated cash hog prices declined $1.33 per hundredweight last week. Pork packer margins improved by more than $4 per head for the week, leaving losses at slightly more than $10 per head, according to the Sterling Pork Profit Tracker.

A year ago cattle feeders sold cash cattle at $108.42 per hundredweight, resulting in losses of $112.88 per head. Last year cash hogs fetched $96.10 per hundredweight, resulting in profits of $35.85 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 21:

  • Average feedyard margins: -$270.31 per head.
  • Average packer margins: $6.68 per head.
  • Sterling Profit Quotient: -813.4.

The Sterling Pork Profit Tracker for the week ending July 21:

  • Average farrow-to-finish margins:  $21.94 per head.
  • Average pork packer margins: -$10.33 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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Mo.  |  July, 25, 2012 at 09:13 AM

And the cow-calf producers are losing how many hundred $ per head? You never write much about that

c andrews    
chicago-kansas  |  July, 25, 2012 at 09:41 AM

It is amazing how high prices acheived with no sence of values to the consumers. Nothing new but far out reached any previous peaks. It now appears there is a balance at present price levels of $175 choice cutout and $112. live. What will $8.00 corn drive feeders/calves to?

Iowa  |  July, 25, 2012 at 07:48 PM

Both feeders/calves and producer will become veggie eaters, ending a society of protien consumers. I fed my last group of calves in April. I could not afford to do it any more. I'm now in the conversion of being a grain farmer. NOT EASY. Excessive amount of free time on my hands. I applaud all of you that hang in there, the conversion is NOT EASY

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