Profit Tracker: Modest Gains, Packers Slipping

November 3, 2015 10:35 AM
Profit Tracker: Modest Gains, Packers Slipping

Another small rally in cash fed cattle markets provided another modest improvement in feeder margins, but closeouts remain $24.66 per cwt. short of break even. Cattle feeding margins improved $23 per head which left losses at $320, according to calculations by Sterling Marketing, Vale, Ore.

Last week’s 5-area cash price was $137.26 per cwt., well short of the $161.92 per cwt. required to break even. Beef packer margins declined $3 per head, resulting in average profits of $12 on every animal processed. Packer margins have declined $86 per head over the past month.

A month ago cattle feeders were losing $550 per head, while a year ago profits were pegged at $209 per head, according to Sterling Marketing. Feeder cattle represent 79.5% of the cost of finishing a steer, significantly higher than last year’s 75%.

A month ago beef packers were earning $98 for every animal processed, while a year ago packers were losing $84, Sterling Marketing estimates.

Farrow-to-finish pork producers showed a profit margin of $1.50 per hog last week, a decrease of $12.50 per head from the previous week and down $18 from a month ago.

Pork packers saw their margins decline $1 per head to $22. Negotiated prices for lean hogs were $66.29, per cwt. last week, a decrease of $5.27 per cwt. from the previous week. Cash prices for fed cattle are $30 per cwt. lower than last year, and negotiated hog prices are $23 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $490 per cow this year. Last year’s estimated average cow-calf margins were $526 per cow. Cow-calf profits for 2016 are projected at $277 per cow.

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Spell Check

Carmel, IN
11/3/2015 11:38 AM

  Great article!


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