Profit Tracker: Treading Water

June 23, 2016 01:29 PM

Cattle feeding profits declined $20 per head last week, yet closeouts remained $11 in the black. The retreat in margins was the result of a $6 per cwt. decline in the cash cattle market, according to Sterling Marketing, Vale, Ore. USDA’s 5-area cash price was $121.38. The total cost of finishing cattle last week was $1,677, compared to $1,739 the previous week and $2,247 last year.

Beef packer margins increased $48 per head, resulting in average profits of $192 on every animal processed. Packer margins are about $88 per head better than a month ago.

A month ago cattle feeders were earning $226 per head, while a year ago losses were pegged at $160 per head, according to Sterling Marketing. Feeder cattle represent 73% of the cost of finishing a steer, compared to 78% last year.

A month ago beef packers were earning $105 for every animal processed, while a year ago packers were earning $86, Sterling Marketing estimates.

Farrow-to-finish pork producers earned $43 per hog last week, about $6 per head better than last week, and $9 per head better than a month ago.

Pork packers saw their margins decline about $3 from last week to an average of $1 per head. Negotiated prices for lean hogs were $82.02 per cwt. last week, an increase of $1.79 per cwt. from the previous week. Cash prices for fed cattle are $28 per cwt. lower than last year, and negotiated hog prices are $3 higher than last year.

Nalivka projects average cash profit margins for cow-calf producers at $177 per cow this year. Last year’s estimated average cow-calf margins were $432 per cow. 

Markets Drive Profits Down

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