Cattle and hog feeding operations are experiencing the highest market prices since before the pandemic began more than a year ago. Hog margins were positive for the 11th consecutive week, according to the Sterling Profit Tracker.
Cattle feeders saw average profits of $198 per head last week, according to calculations by Sterling Marketing. Average closeouts saw total costs for finishing a steer about $30 per head lower than the previous week at $1,520, most of that due to lower feeder cattle prices factored into the analysis. Total finishing costs were $95 per head lower than last year.
Packer margins gained $31 per head to an average of $594. The result was a packer/feeder margin spread of $396 per head, up $2 per head from the previous week’s $394.
Beef packer capacity utilization was estimated at 89.5%, up 1.2% from the previous week, with an estimated 640,000 head slaughtered. A year ago packer capacity was estimated at 64.0% with a weekly kill of 486,036 head. Carcass weights this year are running 14 pounds heavier at 830 pounds.
Beef packer margins gained based on a $7.74 per cwt. advance in the beef cutout to $272.71. A year ago the cutout averaged $230.12. A year ago packer profits were estimated at $444 per head. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
Farrow-to-finish pork producers saw their margins gain $7 per head with positive margins for the 11th consecutive week and total profits of $87 per head. Hog profit margins have increased $30 per head over the past month.
Lean carcass prices traded at $105.53 per cwt., an increase $3.10 per cwt. from the previous week, and $14 per cwt. higher than a month ago. A year ago pork producers lost an average of $49 per hog.
Pork packer margins averaged a profit of $4 per head, down $5 per head from the previous week and $24 per head lower than last year. Pork packer capacity utilization was estimated at 87.2% compared to 79.1% a year ago.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2021 will average $125 per cow. For feedyards, Nalivka projects an average profit of $13 per head in 2021, and packer margins are projected to average $365 per head.
For farrow-to-finish pork producers, Nalivka projects 2021 will produces profits of $35 per head. Pork packers are projected to earn $23 per head in 2021.
