Profit Tracker: Margins Improve as Weather Tanks
Cash cattle prices were mostly steady in the aftermath of last week’s winter storm and cattle feeding margins improved modestly. Cattle feeders lost an estimated $106 per head the week ending Jan. 13, an improvement of $54 per head, according to the Sterling Beef Profit Tracker. Higher wholesale beef prices helped reduce packer losses by $15 per head to a total of $110.
Cash cattle averaged $174.11 per cwt. last week while wholesale beef prices improved $4 per cwt. to $280.35 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.
Cattle sold last week carried a total feed cost of $436 per head, down about $11 per head from the previous week, and about $128 less than feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $181.73 per cwt., while cattle placed on feed last week have a breakeven of $160.71 per cwt., which is about $2 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 $218.15 per cwt., or $1 per cwt. less than a month ago. The feeder steer price is 18% higher than last year.
The estimated total cost for finishing a steer last week was $2,544 per head, up 16% from last year’s estimate of $2,143 per head.
Fed cattle slaughter totaled an estimated 429,156, down 73,000 head from the same week last year. Packing plant capacity utilization was estimated at 73.3% compared to 85.7% last year.
Farrow-to-finish hog producers saw losses of $55 per head last week, about $2 less than losses the previous week. Pork producer margins have now been negative every week for the past year. Lean carcass prices averaged $47.46 per cwt., $0.06 per cwt. lower than the previous week and down $28.14 from last year (-37%).
Pork packers saw profits of about $72 per head, or $4 per head more than the previous week, and their best profit margins since January 2022. Last year pork packers saw profits of $5 per head. Hog slaughter was estimated at 2.174 million head, down 197,000 head from the previous week and down 515,000 head from last year.
Pork packer capacity utilization was estimated at 80.3% compared to 97.4% 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.)