Profit Tracker: Packer, Feeding Margins Rebound

August 4, 2015 06:35 AM

Beef packer margins jumped into the black last week while cattle feeders saw their margins improve $88 per head, according to the Sterling Beef Profit Tracker. Choice steer prices traded $2 per cwt. higher at $147.53 per cwt., which reduced feedyard losses from $156 per head to $68 per head. Packers moved from a $1 per head loss to a $21 per profit per head.

Closeouts were also positively impacted by a $7 per cwt. decrease in the price of feeder cattle calculated against last week’s marketings. Packer margins were aided by the first increase in the beef cutout in two months, though the gain was less than a dime per cwt. to $232.02.

A month ago cattle feeders were losing just $11 per head, while a year ago profits were pegged at $354 per head, according to Sterling Marketing, Vale, Ore. Feeder cattle represent 78 % of the cost of finishing a steer, still significantly higher than last year’s 73%.

A month ago beef packers were earning $141 on every animal processed, while a year ago packers were earning $93, Sterling Marketing estimates.

Farrow-to-finish pork producers showed a profit margin of $20 per hog last week, down $2 from the  previous week and a month ago.

Pork packers saw their margins improve $3 per head $6 per head profit. Negotiated prices for lean hogs were $77.65 per cwt. last week, up 26 cents per cwt. from the previous week.

Cash prices for fed cattle are $15 per cwt. lower than last year, and negotiated hog prices are $50 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $606 per cow this year. Last year’s estimated average cow-calf margins were $548 per cow.

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