Profit Tracker: Extreme Losses Return

November 9, 2015 05:16 PM

Last week erased the modest gains cattle feeders saw the past few weeks and tacked on more heavy losses. Feedyard closeouts slumped an additional $166 per head producing average industry losses of $486 per head, according to Sterling Marketing, Inc., Vale, Ore. Last week’s 5-area cash price was $131.22 per cwt., $37.40 per cwt. short of breakeven.

Beef packer margins increased $17 per head, resulting in average profits of $29 on every animal processed. Packer margins have declined $85 per head over the past month.

A month ago cattle feeders were losing $474 per head, while a year ago profits were pegged at $209 per head, according to Sterling Marketing. Feeder cattle represent 80% of the cost of finishing a steer, significantly higher than last year’s 75%.

A month ago beef packers were earning $117 for every animal processed, while a year ago packers were losing $75, Sterling Marketing estimates.

Farrow-to-finish pork producers lost $20 per hog last week, down from a profit of $1.50 per head the previous week, and down $40 per head from a month ago.

Pork packers saw their margins improve $5 per head to $27. Negotiated prices for lean hogs were $58.33 per cwt. last week, a decrease of $7.96 per cwt. from the previous week. Cash prices for fed cattle are $36 per cwt. lower than last year, and negotiated hog prices are $30 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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