Feedyards are as close to breaking even on a cash basis as they’ve been during any point in the past 18 months. Last week the Sterling Beef Profit Tracker estimated cash losses at $30 per head, and certainly some cattle made a little money.
Last week’s closeouts improved $45 per head as cash fed cattle prices rallied $3 per cwt., a much needed boost as prices had retreated about $10 per cwt over the previous two weeks.
USDA’s 5-area cash cattle prices closed at $126.90, compared to $123.76 the week before. Average break evens were $129.07, about equal to the previous week.
Feeder cattle prices averaged $172 per cwt. against the fed cattle sold last week, according to John Nalivka, Sterling Marketing, Vale, Ore. The total cost of finishing cattle marketed last week was $1,795 per head, $12 per head lower than the previous week.
Beef packer margins declined $79 per head, with profits now at $48 per animal. Packer margins remain about $24 per head higher than a month ago.
Sterling Marketing estimates feedyards lost a cumulative unhedged $3.2 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 $42 per head, while a year ago feedyard closeouts were $65 in the red, according to Sterling Marketing. Feeder cattle represent 74% of the cost of finishing a steer, compared with 79% a year ago.
A month ago beef packers were earning $25 for every animal processed, while a year ago packers were earning $26 per head, Sterling Marketing estimates.
Farrow-to-finish pork producers found profits of $26 per hog last week, up about $8 per head from the previous week, and up $16 per head over the past two weeks.
Pork packer margins were $4 per head lower for a $7 profit per hog. Negotiated prices for lean hogs were $73.93, about $3 per cwt. higher than the previous week. Cash prices for fed cattle are $35 per cwt. lower than last year, and negotiated hog prices are $5 per cwt. lower than last year.
Sterling Marketing projects 2016 average cash profit margins for cow-calf producers at $233 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.