Profit Tracker: Margins Back In The Red

Profit Tracker: Margins Back In The Red

Cattle feeding margins declined nearly $55 per head last week on sharply lower cash cattle sales, leaving feedyards printing closeouts with red ink again. Losses averaged $3 per head last week after profits exceeded $50 per head the week before, according to the Sterling Beef Profit Tracker. Live cattle sales averaged nearly $7 per cwt. lower for the week at $162.85. A month ago feeders were losing an average of $25 per head, while a year ago profits totaled $135 per head.

Lower fed cattle prices, coupled with $9 per cwt. advances in the beef cutout, pulled beef packer margins out of negative territory for the first time in months. Beef packers recorded average profits of $15 on every animal processed last week.

Farrow-to-finish pork margins fell $5 per head last week, closing with a per head profit of just $1. 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 $6 per hundredweight lower, while average total feed costs were $8 per head higher. 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 $60 on every animal processed, while a year ago packers were seeing profits of $52 per head, Sterling Marketing estimates. Pork packers saw their margins improve about $6 per head, with profits now at $12 per head.

Cash prices for fed cattle are $20 per cwt. higher than last year, and negotiated hog prices are $2 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $700 per cow this year. Last year’s estimated average cow-calf margins were $548 per cow. 

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