Profit Tracker: Average Feeding Margins Exceed $130

Cattle & Hogs ( Wyatt Bechtel and National Pork Board )

Last week marked the end of a seven-week mid-summer rally to cash cattle prices as most trades occurred at $105 per cwt., $1 to $2 lower. However, feedyard closeouts improved nearly $100 per head as the cost of feeder cattle calculated against last week’s marketings were significantly lower.

Average feedyard profits totaled $134 per head, according to the Sterling Beef Profit Tracker. A month ago losses averaged $158 per head. Packers saw their margins improve an average of $63 per head to a total of $431 as the Choice beef cutout increased about $8 per head to $228 per cwt.

Feedyard margins reported by the Sterling Profit Tracker are calculated on a cash basis only with no adjustment for risk management practices.

A year ago cattle feeders saw cash losses of $55 per head on closeouts the final week of August, while packers saw profits of $438. Last year’s Profit Tracker for the fourth week of August was the second to see the impact of the fire at Tyson’s Finney County, Kan., facility. (Note: The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs.)

Feeder cattle represent 73% of the cost of finishing a steer compared to 72% a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

Farrow-to-finish pork producers saw their margins improve $6 per head but continue to lose an average of $25. Lean carcass prices traded at $44.31 per cwt., up $2.73 per cwt. A year ago pork producers earned $6 per head profit. Pork packers saw average profits of $52 per head last week, about $8 per head less than the previous week.

(Editor’s note: Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)

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