Profit Tracker: Feeder Margins Tumble Again

April 23, 2015 10:54 AM
Profit Tracker: Feeder Margins Tumble Again

Cattle feeding margins took another turn south last week after a nearly $4 per cwt. decline in fed cattle prices. Cattle feeders lost an average of $190 per head last week, about $35 more than losses recorded the previous week.

Cash cattle prices declined nearly $4 per cwt., with the 5-area direct cash price at $160.59. That was well below the average breakeven price of $175.23, according to the Sterling Beef Profit Tracker. A year ago cattle feeders were earning $176 on every animal sold.

Beef cutout prices trended about $1 per cwt. higher to $257.45, and packer margins improved more than $50 per head, resulting in average profits of $28 on every animal processed.

Farrow-to-finish pork margins improved nearly $4 per head, producing losses of $10.67 per head. Both beef and pork profit margins are calculated by Sterling Marketing, Vale, Ore.

The cost of feeder cattle factored against last week’s live cattle sales was unchanged compared to the previous week. Feeder cattle represent more than 80% of the total cost for finishing a steer, up significantly from last year when feeder cattle represented 73% of that total cost.

A month ago beef packers were losing $48 on every animal processed, while a year ago packers were losing $60, Sterling Marketing estimates. Pork packers saw their margins decline $6 per head, with losses of about $6 per head. Cash prices for fed cattle are $13 per cwt. higher than last year, and negotiated hog prices are $54 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $541 per cow this year. Last year’s estimated average cow-calf margins were $548 per cow. 

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Spell Check

Alice Davis
4/24/2015 08:13 AM

  I am not very familiar with the cattle market. It is hard for me to know when the price for cow/calf producers are up or down. I appreciate this article and maybe in the near future I will better understand it. Thanks


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