Profit Tracker: Feeder, Packer Margins Improve

April 9, 2015 12:12 PM
Profit Tracker: Feeder, Packer Margins Improve

The pain eased somewhat for cattle feeders last week, but losses remain more than $97 per head.

Cash cattle prices rallied $2 per cwt., with the 5-area direct cash price at $167.41. That was well below the average breakeven price of $174.92, according to the Sterling Beef Profit Tracker. Still, average feeding margins were about $30 per head better than the previous week when feedyards lost $129 per head. A year ago cattle feeders were earning $223 on every animal sold.

Beef cutout prices trended about $5.40 per cwt. higher to $253.57, and packer margins improved more than $15 per head, resulting in losses of $40 on every animal processed.

Farrow-to-finish pork margins slipped more than $4 per head, producing losses of $21.23 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 about $3 per head lower 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 earning $4 on every animal processed, while a year ago packers were losing $36, Sterling Marketing estimates. Pork packers saw their margins decline $5 per head, with profits now at $2 per head. Cash prices for fed cattle are $17 per cwt. higher than last year, and negotiated hog prices are $70 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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