Softer cattle and beef markets erode feeding, packing margins

Cattle feeding margins declined nearly $35 per head last week as cash fed cattle prices dropped $1 per hundredweight and boxed beef prices declined $5. Average profits, according to the Sterling Beef Profit Tracker, remain near the $40 per head level. Packer margins declined $10, leaving losses in excess of $55 for every animal processed, according to Sterling’s weekly analysis. The Sterling Beef Profit Quotient declined 110 points for the week, according to estimates developed by Sterling Marketing, Inc., Vale, Ore.

Pork producer margins declined $0.49 per head last week, but farrow-to-finish margins remain solidly profitable. Pork packer margins declined $2.41 per head, resulting in losses of more than $9 per head, according to the Sterling Pork Profit Tracker.

Cash fed cattle traded at $126.11 per hundredweight last week, while Western Corn Belt negotiated hog prices were $87.66 per hundredweight.

A year ago cattle feeders sold cash cattle at $113.60 per hundredweight which resulted in profits of $197.10 per head. Last year cash hogs fetched $81.82 per hundredweight resulting in profits of $11.36 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 March 17:

• Average feedyard margins: $39.88 per head.
• Average packer margins:   -$55.85 per head.
• Sterling Profit Quotient: 105.9.

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

• Average farrow-to-finish margins:  $13.54 per head.
• Average pork packer margins:   -$9.63 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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