Profit Tracker: Feedyard Margins Decline 35%

A $3 per cwt retreat in cash cattle prices pushed cattle feeding margins $67 per head lower. ( Wyatt Bechtel )

Last week’s $3 per cwt retreat in cash cattle prices pushed feeding margins 35% lower, to an average of $117 profit per head. Margins were $67 per head lower than the previous week, according to the Sterling Beef Profit Tracker.

For the week ending May 3, cash cattle sold for an average of $123.19 per cwt., while the beef cutout closed the week at $228.01 down $3.51 from April 26. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

A year ago cattle feeders were earning an average of $92 per head. Feeder cattle represent 71% of the cost of finishing a steer compared with 72% a year ago.

Farrow-to-finish pork producers saw their margins improve $1 per head with profits of $49 per head. Lean carcass prices traded at $82.99 per cwt., $0.50 per cwt. lower than the previous week, and $4.61higher than a month ago. A year ago pork producer margins were positive $6 per head.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2019 will average $153 per cow. That would be modestly lower compared to the $162 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 $74 per head in 2019, which would be $50 better than the average of $24 per head in 2018.

For farrow-to-finish pork producers, Nalivka projects average profits of $26 per head in 2019, as compared with an average profit of $1.35 per head in 2018.

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