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Profit Tracker: Feeding Margins Increase

08:38AM Sep 05, 2014

Cattle feeding margins increased $10 per head last week as cash cattle prices improved, according to the Sterling Beef Profit Tracker. The increase in margins was the first gain in a month, leaving average profits above $170 per head. A year ago feedyards were losing nearly $60 per head. Farrow to finish pork margins declined $12 per head to $28.10. Both beef and pork profit margins are calculated by John Nalivka, president, Sterling Marketing, Vale, Ore.

While cattle feeding profits remain at relatively high levels, pork profit margins have eroded significantly recently. Farrow-to-finish margins have declined more than $60 per head over the past month, losing roughly two-thirds of the $92 per head profits found in early August. Despite the decline, last week’s pork margins were well above last year’s $5 per head profits.

Beef cutout values declined about $4 per cwt. last week, and packer margins fell nearly $40 per head to total $81 per head. Beef packer profits totaled $13 per head at the same time last year. Pork packers saw a $1 per head decline in profit margins to $9.47 per head.

Cash prices for fed cattle are nearly $32 per cwt. higher than last year, and negotiated hog prices are $5 per cwt. higher than last year.