Profit Tracker: Feeding Margins Improve

Feedyard profitability improved with a $1 increase in cash prices. ( FJ )

Cattle feeding margins climbed to $18 per head for the week ending July 26, after cash cattle prices improved $1 per cwt to $112. Packer margins improved $6 per head at $193, according to calculations by Sterling Marketing.

(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 $41 per head on cash prices of $112. Feeder cattle represent 72% of the cost of finishing a steer compared to 73% 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 improve $19 per head with profits of $51. Lean carcass prices traded at $84.72 per cwt., $9.67 per cwt. higher than the previous week. A year ago pork producer margins were positive $14 per head. Pork packers saw average losses of $14 per head last 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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