Profit Tracker: Another Ugly Week

September 29, 2015 08:27 AM

With cash fed cattle prices tumbling $6 per cwt. last week an increase in cattle feeding losses was certain. The only positive – if it can be called a positive – was that average per head losses only increased $3 to total a whopping $360 per head, according to calculations by Sterling Marketing, Vale, Ore. Cash cattle averaged $129.29 for the week, fully $16 per cwt. lower than a month ago.

Beef packer margins dropped by nearly a third as the beef cutout declined $12 per cwt. Packer margins were pegged at $81 per head compared to $129 the previous week.

A month ago cattle feeders were losing $221 per head, while a year ago profits were pegged at $138 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 $102 for every animal processed, while a year ago packers were losing $38, Sterling Marketing estimates.

Farrow-to-finish pork producers showed a profit margin of $15 per hog last week, an increase of $4 per head from the previous week and down $5 from a month ago.

Pork packers saw their margins decline $3 per head to $13. Negotiated prices for lean hogs were $71.14, per cwt. last week, an increase of $1.36 per cwt. from the previous week. Cash prices for fed cattle are $28 per cwt. lower than last year, and negotiated hog prices are $38 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $506 per cow this year. Last year’s estimated average cow-calf margins were $526 per cow. Cow-calf profits for 2016 are projected at $372 per cow.

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