Profit Tracker: Margins Improve, Remain Negative

March 31, 2015 11:59 AM
Profit Tracker: Margins Improve, Remain Negative

The financial pain of feeding cattle eased again last week, but losses remain more than $125 per head.

Cash cattle prices rallied $2 per cwt., with the 5-area direct cash price at $165.77. That was well below the average breakeven price of $176.68, according to the Sterling Beef Profit Tracker. Still, average feeding margins were about $43 per head better than the previous week when feedyards lost $172 per head. A year ago cattle feeders were earning $242 on every animal sold.

Beef cutout prices trended about $2 per cwt. higher to $248.13, and packer margins improved about $2 per head, resulting in losses of $46 on every animal processed.

Farrow-to-finish pork margins slipped more than $1 per head, producing losses of $17 per head. 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 about $12 per head lower compared to the previous week. Feeder cattle represent about 81% of the total cost for finishing a steer, up significantly from last year when feeder cattle represented 73% of that total cost.

A month ago beef packers were losing $17 on every animal processed, while a year ago packers were making $32, Sterling Marketing estimates. Pork packers saw their margins improve $2 per head, with profits now at $7 per head. Cash prices for fed cattle are $13 per cwt. higher than last year, and negotiated hog prices are $71 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $579 per cow this year. Last year’s estimated average cow-calf margins were $548 per cow. 

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