Profit Tracker: A River Of Red Ink Flows

October 15, 2015 11:07 AM

It’s been a rough fall for cattle feeders, but cowboys found some signs last week that suggest the worst may be behind them. Cash fed cattle prices increased an average of $7 per cwt., with last week’s 5-area-average of $125.66. Closeouts remain rather ugly, with average per head losses of $474, but that’s a $75 per head improvement over the previous week, according to calculations by Sterling Marketing, Inc., Vale, Ore.  Beef packer margins improved $16 per head to $114.

A month ago cattle feeders were losing $305 per head, while a year ago profits were pegged at $227 per head, according to Sterling Marketing. Feeder cattle represent 79% of the cost of finishing a steer, significantly higher than last year’s 73%.

A month ago beef packers were earning $142 for every animal processed, while a year ago packers were losing $40, Sterling Marketing estimates.

Farrow-to-finish pork producers showed a profit margin of $19 per hog last week, an increase of $4 per head from the previous week and up $7 from a month ago.

Pork packers saw their margins improve $1 per head to $19. Negotiated prices for lean hogs were $73.43, per cwt. last week, an increase of $0.58 per cwt. from the previous week. Cash prices for fed cattle are $38 per cwt. lower than last year, and negotiated hog prices are $36 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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