Easter week produced a $3 per cwt. decline in fed cattle prices and a $73 erosion in cattle feeding margins. Closeouts revealed an average $186 per head loss, according to the Sterling Beef Profit Tracker.
USDA’s 5-area direct price last week was $135.97, and breakeven prices jumped $2.66 per cwt. to $150.29 as higher feeder cattle prices factored into last week’s marketings.
Feeder cattle prices averaged $196.14 against the fed cattle sold last week, an increase of roughly $30 per head more than the previous week, according to John Nalivka, president of Sterling Marketing, Vale, Ore. The total cost of finishing cattle marketed last week was $1,961 per head.
Beef packer margins declined $33 per head, earning profits of $60 per animal. Packer margins are about $48 per head better than a month ago.
Sterling Marketing estimates feedyards lost a cumulative unhedged $4.7 billion in 2015, with average weekly losses of $239.26 per head. That compares to an unhedged profit of $3.9 billion in 2014, and losses of $1.1 billion in 2013.
A month ago cattle feeders were losing $165 per head, while a year ago feedyard closeouts were $129 in the red, according to Sterling Marketing. Feeder cattle represent 77% of the cost of finishing a steer, compared with 81% a year ago.
A month ago beef packers were earning $12 for every animal processed, while a year ago packers were losing $55 per head, Sterling Marketing estimates.
Farrow-to-finish pork producers found profits of $2 per hog last week, down from last week’s profit of $6.
Pork packers saw a $2 increase in profit margins to $14 per head. Negotiated prices for lean hogs were $63.84, down nearly $1 per cwt. from the previous week. Cash prices for fed cattle are $30 per cwt. lower than last year, and negotiated hog prices are $5 per cwt. higher than last year.
Sterling Marketing projects 2016 average cash profit margins for cow-calf producers at $263 per cow. Last year’s estimated average cow-calf margins were $432 per cow. Cow-calf profits for 2014 were estimated at $517 per cow.