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Profit Tracker: Feedyard Margins Improve, Remain Red

18:16PM Feb 12, 2015

Cattle feeding margins improved nearly $25 per head last week, but average per head losses remain more than $32. Last week’s 5-area direct cash price for fed steers was $160.62, up more than $1 from the previous week, but still below the average breakeven price of $163.11, according to the Sterling Beef Profit Tracker. A year ago cattle feeders were earning $145 on every animal sold.

A $5 per cwt. decline in the boxed beef price drove packer margins $45 per head lower, leaving losses at $52 on every animal processed.

Farrow-to-finish pork margins were unchanged at a positive $13 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 unchanged last week, while the total costs for the animal and feed was $8 per head lower. Feeder cattle represent nearly 80% of the total cost for finishing a steer, up significantly from last year when feeder cattle represented 69% of that total cost.

A month ago beef packers were losing an average of $58 on every animal processed, while a year ago packers were losing $56, Sterling Marketing estimates. Pork packers saw their margins decline about $2 per head, with profits now at $11 per head.

Cash prices for fed cattle are $20 per cwt. higher than last year, and negotiated hog prices are $4 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.