Profit Tracker: Cash Rally Fuels Higher Feeding Profits

03:25PM Oct 14, 2014
feedlot cattle 10 Kansas 532
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Cattle feeding margins improved $27 per head last week pushing average profits above $227 per head. Profits jumped higher on a $4 per cwt. advance in cash prices despite a $6 per head increase in feed costs, according to the Sterling Beef Profit Tracker. A year ago cattle feeding margins sat at $89 per head.  Farrow to finish pork margins held steady at slightly more than $63 per head. Both beef and pork profit margins are calculated by John Nalivka, president, Sterling Marketing, Vale, Ore.

Futures markets attempted to pull cash down last week, but smaller show lists and strength in the boxed beef trade resulted in $2 to $4 gains for cash fed cattle. Prices were mostly $164 to $167 per cwt. live and $258 to $263 per cwt. dressed. Cattle feeders are seeking higher prices this week.

With the Choice cutout improving nearly $7 per cwt. last week, packer margins improved significantly, though packers continue to lose $40 on every animal processed. At this time last year packers were losing about $65 per head. Pork packers saw their average profits increase about $3.50 per head last week to more than $22.

Cash prices for fed cattle are nearly $36 per cwt. higher than last year, and negotiated hog prices are $17 per cwt. higher than last year.

Nalivka projects average cash profit margins for cow-calf producers at $527 per cow this year. Last year’s estimated average cow-calf margins were $243 per cow.