Profit Tracker: Cattle, Hog Margins Treading Water

Average cattle feeding margins improved $15 per head last week, with closeouts showing a modest $42 per head return over breakeven. Industry-wide average cash cattle prices were mostly steady at $111 and average per head feed costs declined about $2, according to the Sterling Beef Profit Tracker.

The total cost for finishing a steer marketed last week was $1,465, about $87 less than the same week a year ago.  Cash cattle prices that were $14 per cwt. higher a year ago produced profits of about $146 per head the second week of the New Year. This year feeder cattle represent 67% of the cost of finishing a steer compared with 73% a year ago.

Beef packer margins declined $48 per head with profits of $179, the lowest margin since last March. Packer margins have declined $259 per head the past month after posting margins of $490 the first week of December.

The decline in packer margins corresponds with the decline in wholesale beef prices. Last week’s beef cutout price averaged about $205 per cwt., down 14% from the $238 per cwt. reported the week ending Dec. 4. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

Farrow-to-finish pork producers saw their margins improve $2 per head to a loss of $12. Lean carcass prices traded at $52.41 per cwt., $1.85 higher than the previous week, and $3 lower than a month ago. A year ago pork producers lost an average of $15 per head. Pork packer margins averaged a profit of $46 per head last week, a $6 per head increase from the previous week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2021 will average $123 per cow. For feedyards, Nalivka projects average profits of $83 per head in 2021, and packer margins are projected to average $270 per head.

For farrow-to-finish pork producers, Nalivka projects 2021 will produces profits of $5 per head. Pork packers are projected to earn $40 per head in 2021.