Profit Tracker: Beef Margins Near $200 Per Head

03:53PM May 06, 2014
BT Rotator Feedlot 7
( Wyatt Bechtel )

Cattle feeding margins jumped nearly $17 per head higher last week to average $196.50. The increase in profitability was due to an average $1.63 per cwt. increase in cash cattle prices and a decline in total feed costs for the calculated feeding period, according to the Sterling Beef Profit Tracker.

Profit margins for pork producers fell $11.46 per head last week to $75.63 per head. The decline was tied to a $3.15 per cwt. decline in negotiated cash prices. Both beef and pork margins are calculated by John Nalivka, president, Sterling Marketing, Vale, Ore.

Cattle feeders’ profits last week were $287 per head more than at the same time last year when $91 per head losses were recorded. Beef cutout values were nearly steady with the previous week, but packer margins declined $6.42 per head, leaving packers with per head profits at $16.67. A month ago packers recorded losses of $36 on every animal processed, and losses totaled $21 per head at the same time last year.

Farrow-to-finish hog margins have experienced decline for several weeks and are now $36 per head lower than the $111 per head profits recorded a month ago. Pork packers saw their margins improve last week, but the average was still $2.73 in the loss column for every animal processed.

The spike in both cattle feeding and farrow-to-finish profits this spring is due to significantly higher cash prices and lower overall feed prices. Cash prices for fed cattle are more than $20 per cwt. higher than last year, and negotiated hog prices are more than $25 per cwt. higher than last year.