Profit Tracker: Feedings Costs 25% Higher YOY

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The average cost of feeding a steer to finish weight was 25% higher for cattle marketed last week and is projected to be 31% higher for cattle placed on feed last week at roughly $600 per head, according to the Sterling Beef Profit Tracker.

For the week ending August 27, cattle feeders saw average profits of $138 per head as the 5-area fed steer price averaged $145.61 per cwt. That price was 15% higher than the same week a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Oregon.

Estimated beef packer margins for the week ending August 27 were $126 per head, down $24 per head from the previous week and down 89% from estimated margins a year ago that exceeded $1,100 per head. Last week’s Choice beef cutout averaged $259.45 per cwt., about $1 lower than the previous week and down $83 per cwt. (24%) from the same week a year ago.

Feed costs for the cattle marketed last week averaged $561 per head, down $14 from the previous week but up $121 per head from last year. The estimated total cost for finishing a steer last week was $1,900 per head, up 16% from last year’s estimate of $1,644 per head.

Cattle slaughter totaled an estimated 678,000 up 26,000 head (4%) from the same week last year. Packing plant capacity utilization was estimated at 92.5% compared to 90.2% the previous week and 88.7% last year.

Farrow-to-finish hog producers found profits of $75 per head last week, down $10 per head from the previous week but up $28 per head (58%) from last year. Lean carcass prices averaged $127.15 per cwt., down $3 per cwt. from the previous week but up $26 from last year (26%).

Pork packers saw losses of an estimated $51 per head, which is steady with the previous week but $68 per head less than the $16 profit per head from last year. Hog slaughter was estimated at 2.393 million head, down 2,000 head from the previous week and down 38,000 head (2%) from last year.

Pork packer capacity utilization was estimated at 88.8% compared to 88.9% the previous week and 90.4% 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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