Profit Tracker: Feeding, Packing Margins Remain Red
Falling throughout November, cattle feeding margins entered negative territory two weeks ago and confirmed the trend last week with another decline, printing losses of about $10 per head, according to the Sterling Bee Profit Tracker. Meanwhile, packer margins saw improvement from their $70 per head losses to $38 per head losses last week. Just a month ago cattle feeders were recording $300 average per head profits.
For the week ending Nov. 25, cash cattle prices averaged $176.62 per cwt., which is roughly $1.15 lower than the previous week. Wholesale beef prices posted an average of $292.53 per cwt., up $1 per cwt. 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 $512 per head, down about $4 per head from the previous week, and about $85 less than feed costs for cattle sold the same week a month ago. Feed costs are 14% lower than a year ago.
Cattle marketed last week had a breakeven of $177.30 per cwt., while cattle placed on feed last week have a breakeven of $165.99 per cwt., which is about $6 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 $224.28 per cwt., or $11 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 $2,482 per head, up 19% from last year’s estimate of $2,026 per head.
Fed cattle slaughter totaled an estimated 411,570, down 75,000 head from the previous week and 54,335 fewer than the same week last year. Packing plant capacity utilization was estimated at 70.3% compared to 81.5% last year.
Farrow-to-finish hog producers saw losses of $42 per head last week, about $14 more than losses the previous week. Pork producers saw profits of about $6 per head the same week a year ago. Lean carcass prices averaged $64.70 per cwt., about steady with the previous week and down $23.50 from last year (-27%).
Pork packers saw profits of about $41 per head, or $2 per head more than the previous week, and their best profit margins since January 2022. Last year pork packers saw losses of $3 per head. Hog slaughter was estimated at 2.221 million head, down 423,000 head from the previous week and up 12,000 head from last year.
Pork packer capacity utilization was estimated at 81.8% compared to 80.4% 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.)
