Negotiated cash cattle sold at all-time highs the first week in July and higher for the seventh consecutive week. Still, cattle feeding margins declined $12 per head for an industry average $451 per head. Meanwhile, beef packers saw their margins improve $40 per head to a loss of $46 per head, according to the Sterling Beef Profit Tracker. That puts the packer/feeder margin spread at $497 per head in favor of the feeder.
Cash cattle averaged $198.22 per cwt. the week ending July 6, while composite wholesale beef prices posted $6.03 per cwt. gains to close at $324.47 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.
Cattle sold last week carried a total feed cost of $355.47 per head, up $1.50 per head from the previous week, and about $226 less than feed costs for cattle sold the same week a year ago.
Cattle marketed last week had a breakeven of $166.02 per cwt., while cattle placed on feed last week have a breakeven of $189.95 per cwt., which is about $1 per cwt. higher than the previous week and $13.80 per cwt. higher than the same week a year ago. Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $269.99 per cwt., or $13.90 per cwt. more than a month ago. The feeder steer price is 13% higher than last year.
The estimated total cost for finishing a steer last week was $2,324 per head, up 8% from last year’s estimate of $2,134 per head.
Fed cattle slaughter totaled an estimated 424,457, down 75,532 head from the same week last year. Packing plant capacity utilization was estimated at 72.5% compared to 72.7% last year.
Farrow-to-finish hog producers found positive margins of $57 per head last week, up $43 from the previous week. Lean carcass prices averaged $93.30 per cwt., up $2.33 cents per cwt. from the previous week.
Pork packers saw average losses of $9 per head, compared to near breakeven the previous week. Last year pork packer margins were $5. Hog slaughter was estimated at 2.045 million head, up 92,000 head from the same week last year.
Pork packer capacity utilization was estimated at 75.8% compared to 72.5% last year.
(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. 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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