… Sterling estimated average beef packer margins at $504.43… Feedyard closeouts saw average per head losses of $89.49 last week…

 

 

Profit Tracker: Packer Profits Surge Higher

 

Greg Henderson, Drovers  

March 24, 2020

 

Sharply higher beef cutout values produced windfall profits for beef packers last week while cattle feeders saw closeouts with average losses about steady to the previous week, according to the Sterling Beef Profit Tracker.

 

Using an average calculated beef cutout price of $241.73 per cwt. and an average cash cattle price of $109.93, Sterling estimated average beef packer margins at $504.43 for the week ending March 21. The beef cutout price in the Beef Profit Tracker was $35.57 higher than the previous week producing an increase of $329 per head in packer margins.

 

(Note: Friday’s USDA Choice beef cutout value was reported at $253.75, but 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. Here are the calculations.)

 

Feedyard closeouts saw average per head losses of $89.49 last week, about $1 less than the previous week. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The average cash cattle price used in the calculation was $109.93, roughly $1 per cwt higher than the previous week.

 

The packer/feeder cash margin spread for the week ending March 21 was $594 per head in favor of packers.

 

A year ago cattle feeders found cash profits of $136 per head on closeouts the third week in March, while packers saw profits of $133. (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 69% of the cost of finishing a steer compared to 71% 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 decline $9 per head, with losses at $16. Lean carcass prices traded at $51.52 per cwt., $4.13 per cwt. lower than the previous week. A year ago pork producers...

 

more, including links to Sterling Beef & Pork Profit Trackers

https://www.drovers.com/article/profit-tracker-packer-profits-surge-higher