Profit Tracker: Margins Back In The Red

July 25, 2016 06:40 PM

Cattle feeding margins eroded $62 per head last week, falling $35 into negative territory. The decline was driven by a $2.50 decline in cash fed cattle prices to a 5-area average of $114.50, according to the Sterling Beef Profit Tracker. The cost of finishing cattle last week was $1,629, compared to $1,601 the previous week and $2,087 last year, according to Sterling Marketing, Inc., Vale, Ore.

Beef packer margins held steady at $129 per head. Packer margins are about $133 per head better than a year ago, but $63 per head lower than a month ago.

A month ago cattle feeders were earning $9 per head, while a year ago losses were calculated at $64 per head, according to Sterling Marketing. Feeder cattle represent 71% of the cost of finishing a steer, compared to 77% last year.

Farrow-to-finish pork producers earned $25 per hog last week, about $9 per head less than the week before, and $21 per head less than a month ago.

Pork packers saw their margins improve to $24 per head compared to $16 profits the week before. Negotiated prices for lean hogs were $73.47 per cwt. last week, a decrease of $4 per cwt. from the previous week. Cash prices for fed cattle are $31 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $175 per cow this year. Last year’s estimated average cow-calf margins were $432 per cow. 

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