Profit Tracker: Losing Ground

June 14, 2016 03:42 PM
Profit Tracker: Losing Ground

Cattle feeding profits declined $180 per head last week, yet closeouts remained $32 in the black. The retreat in margins was the result of a $2 per cwt. lower cash cattle market and an increase in the cost of feeder cattle prices calculated into the analysis, according to Sterling Marketing, Vale, Ore. USDA’s 5-area cash price was $127.30. The total cost of finishing cattle last week was $1,739, compared to $1,582 the previous week and $2,301 last year.

Beef packer margins decreased $2 per head, resulting in average profits of $142 on every animal processed. Packer margins are about $100 per head better than a month ago.

A month ago cattle feeders were earning $148 per head, while a year ago losses were pegged at $172 per head, according to Sterling Marketing. Feeder cattle represent 74% of the cost of finishing a steer, compared to 78% last year.

A month ago beef packers were earning $48 for every animal processed, while a year ago packers were earning $35, Sterling Marketing estimates.

Farrow-to-finish pork producers earned $37 per hog last week, about $7 per head better than last week, and $9 per head better than a month ago.

Pork packers saw their margins decline about $3 from last week to an average of $4 per head. Negotiated prices for lean hogs were $80.23 per cwt. last week, an increase of $3.35 per cwt. from the previous week. Cash prices for fed cattle are $26 per cwt. lower than last year, and negotiated hog prices are equal to last year.

Nalivka projects average cash profit margins for cow-calf producers at $177 per cow this year. Last year’s estimated average cow-calf margins were $432 per cow. 

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