Profit Tracker: From Bad to Better

September 29, 2016 12:52 PM

Feedyard margins improved last week despite a $3 per cwt. decline in cash cattle prices. That’s because the cost of feeder cattle calculated against last week’s closeouts was about $80 per head less than the prior week, according to Sterling Marketing, Vale, Ore. Cattle feeders lost an average of $41 on every animal shipped, about $48 per head less than the previous week.

Cash prices traded at $106.57, a $3 decline and $8 per cwt. lower than a month ago. The total cost of finishing cattle last week was $1,525, compared to $1,615 the previous week and $2,078 last year, according to Sterling Marketing.

Beef packer margins decreased $21 per head to $122. Packers earned an average of $82 per head during the same period a year ago.

A month ago cattle feeders were losing $59 per head, while a year ago losses were calculated at $280 per head. Feeder cattle represent 73% of the cost of finishing a steer, compared to 77% last year.

Farrow-to-finish pork producers lost $27 per hog last week, about $8 per head more than the week before. A month ago farrow-to-finish pork producers lost about $1 per head.

Pork packers saw their margins improve $4 per head to a total of $40, compared to $36 profits the week before. Negotiated prices for lean hogs were $54 per cwt. last week, a decline of $4 per cwt. from the previous week. Cash prices for fed cattle are $23 per cwt. lower than last year and prices for lean hogs are $17 per cwt. lower.

Sterling Marketing president John Nalivka projects average cash profit margins for cow-calf producers at $178 per cow this year. In 2017, Nalivka projects cow-calf profits of $82. Last year’s estimated average cow-calf margins were $432 per cow.

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