Profit Tracker: Feedyard Margins Exceed $150

January 10, 2017 05:59 PM

Cattle feeders recorded their seventh consecutive week with positive closeouts, maintaining profits north of $150 per head for the week ended Jan. 6. Packers saw their margins slip $18 per head, but profits remain above $130, according to the Sterling Beef Profit Tracker.

Direct cattle traded the first week of 2017 at $118 per cwt., and packers remained moderately aggressive bidders with their solid profit margins. The Choice cutout held steady at $200 per cwt. and underscored packers’ incentive to pay up and keep beef flowing through the pipeline.

The total cost of finishing a steer last week was $1,484, compared with $1,481 the previous week, and $2,085 last year. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.

A month ago cattle feeders were earning $39 per head, while a year ago losses were calculated at $241 per head. Feeder cattle represent 76% of the cost of finishing a steer, compared to 80% last year.

Farrow-to-finish pork producers earned $1 per hog last week, about $10 more than the week before. A month ago farrow-to-finish pork producers lost about $9 per head.

Pork packers saw their margins decline $10 per head to $40. Negotiated prices for lean hogs were $56.70 per cwt. last week, about $2.82 per cwt. higher. Cash prices for fed cattle are $15 per cwt. lower than last year and prices for lean hogs are about $4 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. Estimated average cow-calf margins were $432 per cow in 2015.

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