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Profit Tracker: Feedyard Losses Exceed $150 Per Head

01:20AM Mar 04, 2015

Packers are making headway against negative margins, but feedyards are losing ground. Cash cattle prices dipped nearly 50 cents per cwt. last week, increasing feedyard losses $45 per head, leaving average per head losses at more than $150. Last week’s 5-area direct cash price for fed steers was $158.67, well below the average breakeven price of $170.23, according to the Sterling Beef Profit Tracker. A year ago cattle feeders were earning $284 on every animal sold.

Boxed cutout prices trended nearly $7 per cwt. higher to $244.95, helping packer margins improve nearly $80 per head, leaving losses at $15 on every animal processed.

Farrow-to-finish pork margins improved nearly $15 per head, producing profits of $7 per head. Both beef and pork profit margins are calculated by Sterling Marketing, Vale, Ore.

The cost of feeder cattle factored against last week’s live cattle sales was up about t$5 per head compared to the previous week. Feeder cattle represent more than 81% of the total cost for finishing a steer, up significantly from last year when feeder cattle represented 73% of that total cost.

A month ago beef packers were losing $7 on every animal processed, while a year ago packers were losing $80, Sterling Marketing estimates. Pork packers saw their margins slip $6 per head, with profits now at $10 per head. Cash prices for fed cattle are $7 per cwt. higher than last year, and negotiated hog prices are $31 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $579 per cow this year. Last year’s estimated average cow-calf margins were $548 per cow.