Profit Tracker: Rally Reduces Losses $112

September 20, 2016 02:03 PM

Last week’s $4-plus rally in cash fed cattle prices cut average feedyard losses in half, leaving the red ink totaling $90 on every animal shipped. Cash prices traded at $109.62, better than last week, yet $8 per cwt. lower than a month ago. The total cost of finishing cattle last week was $1,616, compared to $1,666 the previous week and $2,154 last year, according to Sterling Marketing, Vale, Ore.

Beef packer margins decreased $4 per head to $143, according to calculations by Sterling Marketing. Packers earned an average of $130 per head during the same period a year ago.

A month ago cattle feeders were losing $52 per head, while a year ago losses were calculated at $273 per head. Feeder cattle represent 74% of the cost of finishing a steer, compared to 78% last year.

Farrow-to-finish pork producers lost $15 per hog last week, about $8 per head more than the week before. A month ago farrow-to-finish pork producers turned a $5 per head profit.

Pork packers saw their margins improve $6 per head to a total of $35, compared to $29 profits the week before. Negotiated prices for lean hogs were $58 per cwt. last week, a decline of $3 per cwt. from the previous week. Cash prices for fed cattle are $25 per cwt. lower than last year and prices for lean hogs are $12 per cwt. lower.

Sterling Marketing president John Nalivka projects average cash profit margins for cow-calf producers at $178 per cow this year. In 2017, Nalivka projects cow-calf profits of $82. Last year’s estimated average cow-calf margins were $432 per cow.

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