Profit Tracker: Cattle Margins Fall Underwater
Cattle feeders have seen profit margins tumble more than $300 per head over the past month as cash prices eroded an average of nearly $9 per cwt. Last week found margins decline about $97 per head to an average loss of $2.67 per head, according to the Sterling Beef Profit Tracker. That marked the first average negative margin since Oct. of last year. Beef packers found improving margins, yet remain $69 per head underwater. The packer-feeder margin spread narrowed to $66, advantage cattle feeders.
For the week ending Nov. 18, cash cattle prices averaged $177.77 per cwt., which is roughly $2 lower than the previous week. Wholesale beef prices posted an average of $291.54 per cwt., a $3.62 per cwt. decline from the previous week. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.
Cattle sold last week carried a total feed cost of $516 per head, down about $10 per head from the previous week, and about $5 more than feed costs for cattle sold the same week a month ago. Feed costs are 17% lower than a year ago.
Cattle marketed last week had a breakeven of $177.96 per cwt., while cattle placed on feed last week have a breakeven of $165.71 per cwt., which is about $11 per cwt. lower than a month ago. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $225.09 per cwt., or $17 per cwt. less than a month ago. The feeder steer price is 22% higher than last year.
The estimated total cost for finishing a steer last week was $2,491 per head, up 19% from last year’s estimate of $2,026 per head.
Fed cattle slaughter totaled an estimated 490,356, up 13,878 head from the previous week and 27,579 fewer than the same week last year. Packing plant capacity utilization was estimated at 83.7% compared to 90.6% last year.
Farrow-to-finish hog producers saw losses of $28 per head last week, about $9 more than losses the previous week. Pork producers saw breakeven margins the same week a year ago. Lean carcass prices averaged $64.70 per cwt., down $3.96 per cwt. from the previous week and down $23.03 from last year (-26%).
Pork packers saw profits of about $39 per head, or $5 per head more than the previous week, and their best profit margins since January 2022. Last year pork packers saw profits of $7 per head. Hog slaughter was estimated at 2.649 million head, up 72,000 head from the previous week and up 52,000 head from last year.
Pork packer capacity utilization was estimated at 97.8% compared to 94.2% last year.
(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)