Cattle feeding profits improved $22 per head last week, with average closeouts showing profits of $99. It was a boost delivered by a $2.50 per cwt. rally in cash fed cattle prices that occurred late Friday afternoon. The 5-area direct cash price was $119.80 per cwt., while break evens increased $0.87 to $112.65 per cwt., according to the Sterling Beef Profit Tracker.
The cost of feeder cattle calculated against last week’s marketings climbed $2 per cwt., while feed costs declined $4 per head, according to the weekly average calculations.
Beef packer margins declined $11 per head to average $85. The beef cutout dropped $3.45 per cwt. to $199.64. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
Average feed costs totaled $279 per head, while cattle placed on feed last week have a projected breakeven of $112 per cwt.
The cost of finishing a steer last week was calculated at $1,568 per head, which is $75 more than the $1,493 a year ago. A month ago cattle feeders were earning $90 per head, while a year ago profits were calculated at $39 per head. Feeder cattle represent 74% of the cost of finishing a steer, compared to 75% last year.
Farrow-to-finish pork producers saw their margins erode to near breakeven. Profit margins averaged $6 per head the previous week. Lean carcass prices traded at $58.87, a decline of $2.39 per cwt. from the previous week. A year ago pork producers lost an average of $5 per head. Pork packer margins totaled $34 per head last week, a decline of $5 per head.
Cash prices for fed cattle are $10 higher than the same week a year ago. Lean hog prices are about $4 per cwt. higher than last year.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $143 per cow. That would be $34 per head less than the estimated average profit of $177 for 2016. Estimated average cow-calf margins were $438 per cow in 2015.
For feedyards, Nalivka projects an average profit of $232 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $119 per head in 2017, up from $114 in 2016.
For farrow-to-finish pork producers, Nalivka projects 2017 profit margins to average $20 per head, compared to $5 per head last year. Pork packers are projected to earn $25 per head in 2017, up slightly from $24 profit per head in 2016.