Profit Tracker: $90 Per Head Improvement

October 19, 2015 02:03 PM
Profit Tracker: $90 Per Head Improvement

Last week’s $8.50 rally in the cash market was sorely needed, but closeouts remain $29.65 per cwt. short of break even. Cattle feeding margins improved $90 per head which left losses at $385, according to calculations by Sterling Marketing, Vale, Ore.

Last week’s 5-area cash price was $134.09 per cwt., well short of the $163.74 per cwt. required to break even. Beef packer margins declined $65 per head, resulting in average profits of $51 on every animal processed.

A month ago cattle feeders were losing $357 per head, while a year ago profits were pegged at $175 per head, according to Sterling Marketing. Feeder cattle represent 79% of the cost of finishing a steer, significantly higher than last year’s 74%.

A month ago beef packers were earning $132 for every animal processed, while a year ago packers were losing $45, Sterling Marketing estimates.

Farrow-to-finish pork producers showed a profit margin of $17 per hog last week, a decrease of $2 per head from the previous week and up $6 from a month ago.

Pork packers saw their margins improve $3 per head to $21. Negotiated prices for lean hogs were $72.94, per cwt. last week, a decrease of $0.49 per cwt. from the previous week. Cash prices for fed cattle are $30 per cwt. lower than last year, and negotiated hog prices are $31 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $490 per cow this year. Last year’s estimated average cow-calf margins were $526 per cow. Cow-calf profits for 2016 are projected at $277 per cow.

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