Profit Tracker: Profitability Streak Ends

Cattle feeders lost an average of $13 per head last week, breaking a string of 46 consecutive weeks of profitability dating back to November of last year. Last week 5-area Choice steers saw a modest gain of $1.25 per cwt., but costs against those steers marketed last week increased $57 per head, according to the Sterling Beef Profit Tracker.

Beef packers, already with strong margins, saw their profits increase $7 per head to $186. Last week’s beef cutout price was $196, up $1.05 per cwt. from the previous week.

Break even prices for steers sold last week averaged $110.27 per cwt., $4.13 higher than the previous week. However, cattle placed on feed last week have a projected breakeven of $111.40 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

The cost of finishing a steer last week was calculated at $1,535 per head, which is $34 more than the $1,501 a year ago. A month ago cattle feeders were earning $25 per head, while a year ago losses were calculated at $69 per head. Feeder cattle represent 75% of the cost of finishing a steer, compared to 73% last year.

Cash prices for fed cattle are $6 higher than the same week a year ago.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $131 per cow. That would be $46 per head less than the estimated average profit of $177 for 2016. Estimated average cow-calf margins were $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $197 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $120 per head in 2017, up from $114 in 2016.

For farrow-to-finish pork producers, Nalivka projects 2017 profit margins to average $25 per head, compared to $5 per head last year. Pork packers are projected to earn $23 per head in 2017, down slightly from $24 profit per head in 2016.