As we approached the close of the week ending December 23, the agricultural sector, particularly cattle feeders, faced continued economic pressures, as detailed in the latest report from the Sterling Beef Profit Tracker.
The average losses for cattle feeders were pegged at $110 per head, marking a trend of negative margins that has persisted for five consecutive weeks. On the flip side, beef packers saw a slight dip in their profits, with margins averaging at $14 per head, a decrease of $15 from the week prior.
In the realm of market prices, there was a bit of a mixed bag. Cash cattle prices showed a modest uptick, averaging $170.39 per cwt, which is about $2 higher than the week before. In contrast, wholesale beef prices experienced a slight downturn, averaging $285.69 per cwt, down by roughly $1.40 per cwt. These figures, compiled by Sterling Marketing in Vale, Oregon, offer a snapshot of the ongoing market dynamics.
Turning to the costs associated with cattle feeding, there was a noticeable increase in total feed costs, which climbed to $440 per head, up by approximately $2 from the preceding week. However, this figure represents a decrease of about $72 when compared to the same timeframe a month ago, translating to a 22% reduction year-over-year.
The breakeven figures also paint an interesting picture. Cattle marketed last week had a breakeven point of $178.27 per cwt. In comparison, cattle placed on feed last week are facing a breakeven of $166.46 per cwt, marking an increase of around $2 compared to a month ago. The purchase price for 750-800 lb. feeder steers was noted at $225.87 per cwt, up $1 per cwt from the previous month and showing a 22% hike from the previous year.
The estimated total cost for finishing a steer last week was calculated at $2,496 per head, which is a significant 19% increase from the previous year’s estimate of $2,029 per head.
The fed cattle slaughter figures added another layer to the story, with an estimated total of 481,896 head, a decrease from the previous week but an increase of 65,000 compared to the same week last year. The capacity utilisation at packing plants was estimated at 82.3%, a jump from 72.8% last year.
In the hog sector, the narrative was somewhat similar, with farrow-to-finish producers witnessing an increase in losses to $58 per head, marginally higher than the previous week. This contrasted sharply with the same period last year, where losses were around $10 per head. Lean carcass prices averaged $49.71 per cwt, down $1.25 per cwt from the previous week and a steep 40% drop from the previous year.
Pork packers, however, had a different story to tell, with profits averaging about $60 per head, albeit a slight decrease from the previous week. These margins were among the highest since October 2021, starkly contrasting with the meagre profits of $2 per head seen in the same period last year. Hog slaughter was estimated at 2.426 million head, down from the previous week but up by 643,000 head from last year.
Pork packer capacity utilisation stood at 89.9%, significantly higher than the 64.3% recorded last year.
(Note: The Sterling Beef Profit Tracker is a tool that calculates average beef cutout values and other prices every week. It serves as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing operates independently, without ties to any packing company or livestock feeding enterprise.)
