Profit Tracker: Feeder, Packer Margins Ugly

Profit Tracker: Feeder, Packer Margins Ugly

The pain eased somewhat for cattle feeders last week, but losses remain more than $170 per head.

Cash cattle prices rallied $2 per cwt., with the 5-area direct cash price at $163.45. That was well below the average breakeven price of $176.67, according to the Sterling Beef Profit Tracker. Still, average feeding margins were about $40 per head better than the previous week when feedyards lost $212 per head. A year ago cattle feeders were earning $247 on every animal sold.

Beef cutout prices trended about 50 cents per cwt. lower to $245.86, and packer margins declined more than $14 per head, resulting in losses of $48 on every animal processed.

Farrow-to-finish pork margins slipped nearly $10 per head, producing losses of $15.46 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 $2.50 per head lower compared to the previous week. Feeder cattle represent more than 81% 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 $96 on every animal processed, while a year ago packers were making $65, Sterling Marketing estimates. Pork packers saw their margins improve $7 per head, with profits now at $5 per head. Cash prices for fed cattle are $12 per cwt. higher than last year, and negotiated hog prices are $65 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $579 per cow this year. Last year’s estimated average cow-calf margins were $548 per cow. 

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