When one goes down, we all go. Such could be said about the direction of feedlot margins over the past couple of weeks as lower prices for finished and feeder cattle pulled feedlot margins even deeper in the red the week ending December 20. Feedlot margins declined another $8, reaching negative $40.91 last week. Last month at this time, feedlots were earning about $132 per head; however, last year at this time, feedlot margins were negative $15.70.
After multiple days of being limit down, the CME Group expanded margins, an act that brought some stability back to the marketplace. That wasn’t before the price for fed cattle dropped from $161.85 per hundredweight in mid-December to $157.50 per hundredweight last week. Prices for 750 to 800 pound feeder calves was also lower last week, dropping to $222.71, compared to more than $237 per hundredweight 30 days ago. The breakeven for last week’s feedlot placements was also down last week, falling to $168.22 per hundredweight, down from $174.64, according to John Nalivka with Sterling Marketing, Inc.
Beef packer margins continued improving last week but remain in the red. Packer margins were negative $59.88 last week, compared to negative $61.82 the previous week. The beef cutout value decreased again last week to $239.94 per hundredweight, compared to $245.94 the previous week.
Farrow-to-finish margins were down again last week, dropping to $24.84 per head, according to the Sterling Pork Profit Tracker. Last year at this time, margins were negative $8.54 per head.
Lean hogs were dropped to $80.31 per hundredweight the week ending December 19. Last month, lean hogs averaged $88.59 and last year at this time they were $78.23. Feed costs were down for hogs, falling to $81.35 per head.
Pork packer margins increased last week, averaging $10.70 per head compared to $7.71 the previous week. The pork cutout value finished the week at $88.78 per hundredweight, compared to $92.41 the previous week.
The Sterling Beef Profit Tracker for the week ending December 20:
- Average feeder margins: -$40.91 per head
- Average beef packer margins: -$59.88 per head
The Sterling Pork Profit Tracker for the week ending December 19:
- Average farrow-to-finish margins: $34.78 per head.
- Average pork packer margins: $7.58 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.