Packer, feeder margins fall from January highs

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After spending multiple weeks earning positive margins, beef packer margins retreated to negative territory the week ending February 8, 2014, according to the Sterling Beef Profit Tracker. Packer margins topped $121 in late January but fell to negative $56.86 last week. The beef cutout value decreased by $15.70 last week to $216.10. While the cutout value dropped over the week, it is still higher on a historical basis. One year ago at this time, the cutout value was at $182.50 , and at this time last month, the cutout value was at $209.20.

Feeder margins also experienced declines last week, falling from $171.06 the previous week to $145.47 the week ending February 8. Last year at this time, fed steers were negative $77.92. Feed costs increased by $6.13 while total costs dropped nearly $6. Fed steers dropped $4.78 to $140.74 per hundredweight but are nearly $15 per hundredweight higher than they were at this time a year ago. Feeder steers also decreased last week and finished the week at $163.02 compared to $164.52 the previous week.

Farrow-to-finish margins improved once again, finishing the week ending February 7 at $18.30, compared to $13.71 the previous week, negative $7.22 one month ago and negative $11.23 at this time last year, according to the Sterling Pork Profit Tracker. Lean hogs increased by more than $2 last week, finishing the week at $84.26 compared to $82.24 the previous week. Feed costs increased to $93.56 compared to $90.36 the previous week.  

Pork packer margins declined last week to $8.17 compared to $9.67 the previous week and $1.87 one month ago. The pork cutout value increased last week to $91.31, compared to $90.10 the previous week and $84.04 one month ago.

The Sterling Beef Profit Tracker for the week ending February 8:

  • Average feeder margins: $145.47 per head.
  • Average beef packer margins: -$56.86 per head.

The Sterling Pork Profit Tracker for the week ending February 7:                                          

  • Average farrow-to-finish margins: 18.30 per head.
  • Average pork packer margins: $8.17 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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