Profit Tracker: Triple Digit Profits All Around

January 5, 2017 07:29 AM
 
Profit Tracker: Triple Digit Profits All Around

Cowboys and packers finished 2016 on a high note, maintaining per head profits north of $100 for the week ended Dec. 30. Despite a modest decline compared to the previous week, cattle feeders recorded average profits of $120, down $16 per head. Beef packers maintained profit margins at $150 per head, steady with the previous calculations from the Sterling Beef Profit Tracker.

With 2016’s final closeouts printed in black ink, cattle feeders ended the year with six consecutive weeks of profit. Beginning 2017 in the black for feeders and packers is surely a good sign for calf and yearling producers, too.

Direct cattle traded the final week of 2016 at $115 per cwt., down $0.46 per cwt. Packers remained moderately aggressive with their solid profit margins. A $5 per cwt increase in the Choice cutout underscored packer’s incentive to pay up and keep beef flowing through the pipeline.

The total cost of finishing a steer last week was $1,481, compared with $1,471 the previous week, and $2,064 last year. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.

A month ago cattle feeders were earning $92 per head, while a year ago losses were calculated at $196 per head. Feeder cattle represent 75% of the cost of finishing a steer, compared to 80% last year.

Farrow-to-finish pork producers lost $9 per hog last week, about $1 more than the week before. A month ago farrow-to-finish pork producers lost about $25 per head.

Pork packers saw their margins improve $5 per head to $50. Negotiated prices for lean hogs were $53.88 per cwt. last week, about $0.80 per cwt. lower. Cash prices for fed cattle are $14 per cwt. lower than last year and prices for lean hogs are about $3 higher than last year.

Sterling Marketing president John Nalivka projects average cash profit margins for cow-calf producers at $144 per cow for 2016. In 2017, Nalivka projects cow-calf losses of $24. Estimate average cow-calf margins were $432 per cow in 2015.

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