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Profit Tracker: Feeding Margins Fall $45 Per Head

15:59PM Sep 23, 2014

Cattle feeding margins declined $45 per head last week as cash cattle prices dipped $3 per cwt. according to the Sterling Beef Profit Tracker. The softer cattle market was a reflection of increasing supplies of market-ready cattle and the fact packers are struggling with negative margins. Despite the decline in feeding margins, feedyard profits remain above $186 per head. A year ago feedyard margins were approximately $42 per head. Farrow to finish pork margins improved $6.37 per head to $54. Both beef and pork profit margins are calculated by John Nalivka, president, Sterling Marketing, Vale, Ore.

Feed costs continue to decline for cattle feeders. Cattle marketed last week saw feed costs about $77 per head less than cattle marketed at the same time last year. Feed costs for cattle placed on feed last week are projected to be another $100 per head lower.

Beef packer margins declined $23 per head last week leaving packers with losses of just more than $11 per head. Packer profits have been on the decline in recent weeks, though last week’s losses were less than the $30 per head losses recorded last year at this time. Pork packers saw a $6.40 per head gain in profitability to end the week with average margins of $4.48 per head. Cash prices for fed cattle are nearly $34 per cwt. higher than last year, and negotiated hog prices are $9 per cwt. higher than last year.