Profit Tracker: Feeding Margins Exceed $130 Per Head

December 6, 2017 04:05 PM
 
last week's $2 per cwt. rally in fed cattle prices helped boost feedyard closeouts $41 per head to average profits of $131 per head.

Last week's $2 per cwt. rally in fed cattle prices helped boost feedyard closeouts $41 per head to average profits of $131 per head. The 5-area direct cash price was $120.67 per cwt., while break evens were calculated at $111.21, according to the Sterling Beef Profit Tracker.

The cost of feeder cattle calculated against last week’s marketings declined $2.24 per cwt., while feed costs increased $5 per head, according to the weekly average calculations.

Beef packer margins declined $9 per head to average $111. The beef cutout declined nearly $2 per cwt. to $203. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

Average feed costs totaled $276 per head, while cattle placed on feed last week have a projected breakeven of $116 per cwt.

The cost of finishing a steer last week was calculated at $1,548 per head, which is $56 more than the $1,492 a year ago. A month ago cattle feeders were earning $57 per head, while a year ago profits were calculated at $52 per head. Feeder cattle represent 74% of the cost of finishing a steer, compared to 73% last year.

Farrow-to-finish pork producers earned an average of $3 per head last week, an improvement of $5 per head from the previous week. Lean carcass prices traded at $60.58, an improvement of $1.77 per cwt. from the previous week. A year ago pork producers lost an average of $24 per head. Pork packer margins totaled $39 per head last week, about $1 per head lower than the previous week.

Cash prices for fed cattle are $10 higher than the same week a year ago. Lean hog prices are about $13 per cwt. higher than last year.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $143 per cow. That would be $34 per head less than the estimated average profit of $177 for 2016. Estimated average cow-calf margins were $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $232 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $119 per head in 2017, up from $114 in 2016.

For farrow-to-finish pork producers, Nalivka projects 2017 profit margins to average $20 per head, compared to $5 per head last year. Pork packers are projected to earn $25 per head in 2017, up slightly from $24 profit per head in 2016.

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