Strong Beef Demand Pushes the Beef Cutout and Cattle Prices to New Highs

Negotiated cash cattle remained steady the week ending Jan. 11 while feedlot margins increased $83 per head to an industry average of $303.62 per head, according to the Sterling Beef Profit Tracker. Meanwhile, beef packers saw losses improve $47 per head to a loss of $85 per head. That puts the packer/feeder margin spread at $388 per head in favor of the feeder.

Cash cattle averaged $202.96 per cwt. the week ending Jan. 11, while Comprehensive Beef Cutout prices posted a $4 per cwt. increase to close at $323.45 per cwt.

Cattle marketed last week carried a total feed cost of $460.59 per head, about $63 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 $270.15 per cwt., up $8 from a month ago.

The estimated total cost for finishing a steer last week was $2,820 per head, up from last year’s estimate of $2,316 per head.

Fed cattle slaughter totaled an estimated 477,090, down 65,144 head from the same week last year. Packing plant capacity utilization was estimated at 81.8%, up from 70.7% last year.

Farrow-to-finish hog producers found positive margins of $26.18 per head last week, down $6.08 from the previous week, according to the Sterling Pork Profit Tracker. A year ago, those margins were at -$54.04. Lean carcass prices averaged $81.08 per cwt., down slightly from the previous week.

Hogs placed for finishing last week had a breakeven at $68.63 per head.

Pork packers saw average profits of $6.75 per head, down $1 from the previous week. Last year pork packer margins were $72. Hog slaughter was estimated at 2.505 million head, up 405,600 head from the same week last year.