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Profit Tracker: Packers Struggle With Capacity, Margins Deep in the Red

Negotiated cash cattle decreased $3 the week ending Feb. 22 and feedlot margins decreased $41 per head to an industry average of $237.36 per head, according to the Sterling Beef Profit Tracker. Meanwhile, beef packers saw losses of $195.60 per head. That puts the packer/feeder margin spread at $433 per head in favor of the feeder.

Cash cattle averaged $199.87 per cwt. the week ending Feb. 22, while Comprehensive Beef Cutout prices posted a $6.84 per cwt. decrease to close at $317.56 per cwt.

Cattle marketed last week carried a total feed cost of $480.49 per head, about $112 more than feed costs for cattle sold the same week a year ago.

Cattle placed last week are calculated to have a purchase price for 750-800 lb. feeder steers at $269.38 per cwt., down $4 from a month ago.

The estimated total cost for finishing a steer last week was $2,834 per head, up from last year’s estimate of $2,502 per head.

Fed cattle slaughter totaled an estimated 453,778, down 22,438 head from the same week last year. Packing plant capacity utilization was estimated at 77.8%, down from 81.3% last year.

Farrow-to-finish hog producers found positive margins of $49.50 per head last week, up $5 from the previous week, according to the Sterling Pork Profit Tracker. A year ago, those margins were at -$4.47. Lean carcass prices averaged $90.94 per cwt., up slightly from the previous week.

Hogs placed for finishing last week had a calculated breakeven price at $79.78 per head.

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