Packer margins climb into the black, feedyard losses exceed $100

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

Surging boxed beef prices the past two weeks have helped beef packers improve their processing margins about $50 per head, climbing into the black for the first time in months. Cash fed cattle prices dropped another $2.50 per hundredweight last week and cattle feeding margins declined another $17 per head, leaving feeders with losses in excess of $100 per head according to the Sterling Beef Profit Tracker. The Sterling Beef Profit Quotient declined 39 points for the week, according to estimates developed by Sterling Marketing, Inc., Vale, Ore.

Pork producer margins declined $5.47 per head last week, with profits now under $9 per head. Pork packer margins declined 37 cents per head, resulting in losses of $12.04 per head, according to the Sterling Pork Profit Tracker.

Cash fed cattle traded at $118.63 per hundredweight last week, down $2.52, while Western Corn Belt negotiated hog prices were $82.49 per hundredweight.

A year ago cattle feeders sold cash cattle at $116.87per hundredweight which resulted in profits of $211.84 per head. Last year cash hogs fetched $92.41 per hundredweight resulting in profits of $26.81 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 April 28:

  • Average feedyard margins: -$107.33 per head.
  • Average packer margins:   $6.07 per head.
  • Sterling Profit Quotient: -322.1.

The Sterling Pork Profit Tracker for the week ending April 28:

  • Average farrow-to-finish margins:  $8.82 per head.
  • Average pork packer margins:   -$12.04 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.



Comments (1) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left

Doug    
North Dakota  |  May, 01, 2012 at 10:38 AM

The calculated margins are certainly reflective of unprotected spot marketing; however, cattle good performing cattle that were protected using one or more risk management methods are posting closeouts ranging from a slight gain above breakeven to a slight loss below breakeven. Sterling Beef's posted margin calculations are a very real reminder that feeding commodity cattle without using some sort of risk protection can be a recipe for huge losses.


RANGER® Diesel, Sportsman® ATV Series

The Polaris Ranger Diesel sets new standards in terms of efficiency. With its efficient diesel engine, the vehicle is up ... Read More

View all Products in this segment

View All Buyers Guides