Profit Tracker: Feeder Margins Lower, Packer Jackpot

Cattle feeding margins slipped further into the red last week. ( FJ )

Cattle feeding margins declined $27 to total an average loss of $55 per head for the week ending August 23, 2019. The decline was the second week of average losses following the Tyson plant fire at Holcomb, Kan. Cash cattle prices averaged about $108, or $5 lower than before the fire. Packer margins continued to improve reaching $491 per head, according to the Sterling Beef Profit Tracker.

(Note: The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs.)

A year ago cattle feeders were losing an average of $77 per head on cash prices of $109. Feeder cattle represent 71% of the cost of finishing a steer compared to 74% a year ago.

The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

Farrow-to-finish pork producers saw their margins decline $7 per head with profits of $21. Lean carcass prices traded at $69.70 per cwt., $3.34 per cwt. lower than the previous week. A year ago pork producer margins were negative $47 per head. Pork packers saw average profits of $16 per head, $7 less than the previous week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2019 will average $138 per cow. That would be 14% lower compared to the $161 estimated average profit for 2018. Estimated average cow-calf margins were $164 in 2017, $176 in 2016, and $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $62 per head in 2019, which would be $38 better than the average of $24 per head in 2018. Nalivka expects packer margins to average about $155 per head in 2019, about $11 less than in 2018.

For farrow-to-finish pork producers, Nalivka projects an average profit of $13 per head in 2019, as compared with an average profit of $1.35 per head in 2018. Pork packers are projected to earn $16 per head in 2019, about $4 less than the $20 per head profits of 2018.

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