Profit Tracker: Feeding Losses Back To Triple Digits

July 14, 2015 11:55 AM
Profit Tracker: Feeding Losses Back To Triple Digits

Cattle feeding margins took two steps back last week as cash cattle prices hover around what producers hope are the summer lows. Feedyard closeouts revealed a $108 per head loss last week, significantly poorer than the previous week’s loss of just $11 on every animal shipped, according to the Sterling Beef Profit Tracker.

Choice steer prices closed at $151 per cwt., nearly steady with the previous week. A $10 per cwt. decline in beef cutout values slashed beef packer operating margins by $107 per head. The cutout closed Friday at $241.57, and the result was packer operating margins at $33 per head.

Feedyard margins have improved in recent weeks, and just a month ago feeders were losing $270 per head. The improvement is due to significantly lower costs attached to the feeder cattle calculated against closeouts. Feeder cattle were priced into last week’s ledger at $10 per cwt. lower than a month ago. Feeder cattle represent 78.3 % of the cost of finishing a steer, significantly higher than last year’s 72.8%. A year ago feedyards were showing a profit of $302 per head.

A month ago beef packers were earning $34 on every animal processed, while a year ago packers were earning $53, Sterling Marketing estimates.

Farrow-to-finish pork producers showed a profit margin of $25 per hog last week, $5 better than the  previous week, and steady with a month ago.

Pork packers saw their margins decline $7 to a negative $7.55 per head. Pork packer margins hovered near the breakeven mark for several weeks before last week’s decline. Cash prices for fed cattle are $5 per cwt. lower than last year, and negotiated hog prices are $53 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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