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Profit Tracker: Feeding Margins Begin New Year Lower

21:45PM Jan 06, 2015

Cattle feeders began the New Year with black ink on their closeouts, but profits were minimal. Average feedyard margins were $8 per head last week, a $14 per head decline from the previous week, according to the Sterling Beef Profit Tracker. A month ago feeders were earning $45 profits per head, and a year ago profits were $80 per head.

Average cash cattle prices improved $4 per cwt. last week, with the 5-area Direct price at $165.63. The cost of feeder cattle factored into last week’s Profit Tracker was $9 per head higher, while feed costs declined modestly. Feeder cattle represent nearly 80% of the total cost for finishing a steer. A year ago feeder cattle represented 68% of that total cost.

Farrow-to-finish pork margins fell nearly $4 per head last week, closing with a per head profit of $9. Both beef and pork profit margins are calculated by Sterling Marketing, Vale, Ore.

Beef packers saw their margins decline $5 per head, with losses now at nearly $50 per  head, Sterling Marketing estimates. Those losses are $26 per head less than last year’s average losses of $76 per head. The beef cutout was up $5 at $245.23 per cwt.

Pork packers saw their margins decline about $3 per head, with profits now over $11 per head.

Cash prices for fed cattle are $27 per cwt. higher than last year, and negotiated hog prices are $2 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $743 per cow this year. Last year’s estimated average cow-calf margins were $556 per cow.