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Profit Tracker: Feeding Margins Above $230 Per Head

17:28PM Sep 16, 2014

Cattle feeding margins increased $11 per head last week despite slightly lower cash cattle prices. The gains were found in lower overall feed costs and lower prices paid for the feeder cattle that were marketed as fed cattle last week, according to the Sterling Beef Profit Tracker. The increase in margins was the third consecutive weekly gain, leaving average profits above $230 per head. A year ago feedyards were losing nearly $30 per head. Farrow to finish pork margins improved $14 per head to $47. Both beef and pork profit margins are calculated by John Nalivka, president, Sterling Marketing, Vale, Ore.

Feed costs continue to decline for livestock feeders, and both cattle and pork margins are significantly higher than a year ago. The estimated cost of feed to finish a steer in a feedlot is more than $70 less than it was last year at this time, and cattle placed on feed last week have estimated feed costs that are $164 less than cattle marketed a year ago.

Beef packer margins declined $18 per head last week leaving profits at just more than $12 per head. While packer profits have been on the decline in recent weeks, they remain well above the $13 per head losses recorded last year at this time. Pork packers saw a $6.50 per head decline in profit margins to fall into the red at $1.95 per head. Cash prices for fed cattle are nearly $37 per cwt. higher than last year, and negotiated hog prices are $6 per cwt. higher than last year.