Profit Tracker: Feedyard Profits Rise To Triple Digits

03:30PM Dec 03, 2019
BT Cattle Feedlot 2
Cash cattle rally lifts profits.
( FJ )

Feedyards saw closeouts improve dramatically last week after the market’s $2 to $3 per cwt. cash rally. Average feedyard margins for cattle sold last week were $108 per head, a jump of $84 per head, according to the Sterling Beef Profit Tracker.

Packer margins fell $70 per head, putting those profits at $293, the first time packer margins have registered below $300 in months. The packer/feeder margins spread declined $154 last week to $185.

A year ago cattle feeders found profits of $54 per head on closeouts the third week in November, while packers saw profits of $194, for a spread of $140.

(Note: The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs.)

Feeder cattle represent 73% of the cost of finishing a steer compared to 73% a year.

The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

Farrow-to-finish pork producers saw their margins improve $2 per head, putting losses at $41 per head. Lean carcass prices traded at $44.31 per cwt., $0.25 per cwt. better than the previous week. A year ago pork producers were losing $19 per head. Pork packers saw average profits of $71 per head, a decrease of $7 per head from the previous week.

Sterling Marketing president John Nalivka projects cash profit margins cow-calf producers in 2019 will average $114 per cow. That would be 30% lower compared to the $162 estimated average profit for 2018. Estimated average cow-calf margins were $164 in 2017, $176 in 2016, and $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $36 per head in 2019, which would be $12 better than the average of $24 per head in 2018. Nalivka expects packer margins to average about $215 per head in 2019, about $46 higher than in 2018.

For farrow-to-finish pork producers, Nalivka projects an average profit of $6 per head in 2019, as compared with an average profit of $1.35 per head in 2018. Pork packers are projected to earn $20 per head in 2019, about even with profits from last year.

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