Profit Tracker: Thankful Feedlot Losses Aren't Worse

November 22, 2016 04:46 PM
GoPro Feedlot Cattle

One thing feedlot producers can be thankful for heading into Thanksgiving is that red ink isn’t flowing as thick as gravy on dry turkey. Feedlot margins have improved by more than $400, but feeders are still losing some money.

Last year feedlots were on average losing $464.64 per head, compared to losses of just $31.59 this past week. That’s an improvement of $163.10 from last month and $85.92 better than the week ending on Nov. 11, according to the Sterling Beef Profit Tracker.

The climb back towards profitability in feedlot margins follows an upward trend seen in cattle prices. A month ago five-area direct Choice steers were brining only $99.30 per cwt. Prices steadily climbed with Nov. 11 week cattle averaging $103.78. This past week saw Choice steers at $108.14. That’s still nearly $17.65 behind last year’s mark.

Beef cutout values are down slightly after a rally from the previous month. Last month packers paid $178.06 per cwt. The cutout price was up to $180.18 per cwt last week, but down $2.46 per cwt from the previous week. Packer margins are down $68.86 per head from last month, but packers are still maintaining a profit of $131.74 per head. Last year packers were only making $22.48 per head.

Farrow-to-finish hog margins fell $2.79 per head from last week to a loss of $37.54 per head. It isn’t much of a change with hog producers losing $39.38 per head last month.

Negotiated cash hog prices saw a continued downward trend in November with prices falling more than $1.04 per cwt. and finishing the month at $42.70 per cwt. Pork packer margins are up with profits of $56.11 per carcass, compared to $55.33 last week. That’s better than the $43.12 made at the start of the month, and the $33.50 per animal seen in 2015.

Another bright spot for cattle producers was the slight rally seen in feeder prices. This past week’s placements were up $1.81 per cwt. at Oklahoma City for steer’s weighing 750-800 lb. That’s a $6.29 per cwt increase from a month ago. However, it is more than $46 behind last year’s mark of $173.94 per cwt.

Cow-calf producers have seen a dramatic change in profit margins compared to the past few years. Currently producers are averaging $144 in profit per cow, that’s more than 66% less than the $432.87 made last year. According to projections by Sterling Marketing president John Nalivka, cow-calf producers could lose $24 per cow in 2017. 

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