Cattle feeding profits climbed above $108 per head last week as the cash market rallied $1 to $2 per cwt. A wide basis between cash and futures prices provided even more profits to hedged cattle. On a cash basis, however, cattle feeding margins gained about $16 per head from the previous week, according to the Sterling Beef Profit Tracker.
The 5-area direct steer price was $123.24 per cwt., up from the previous week’s $121.78.
The price of feeder cattle calculated against fed cattle sales was $154.27, or, $0.56 per cwt. higher. The cost of finishing a steer last week was calculated at $1,607, which is $183 higher than the $1,424 a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
Beef packer operating margins gained $21 per head to $145. The beef cutout gained $6.27 per cwt. to $216.01.
A month ago cattle feeders were earning $79 per head, while a year ago profits were calculated at $479 per head. Feeder cattle represent 74% of the cost of finishing a steer compared with 73% a year ago.
Farrow-to-finish pork producers saw their margins improve $9 per head to a $7 per head profit, compared with last week $2 loss. Lean carcass prices traded at $60.27 per cwt., a $2.86 per cwt. improvement from the previous week. A year ago pork producers lost an average of $2 per head. Pork packer margins declined $6 per head to $8.
Cash prices for fed cattle are $14 per cwt. lower than the same week a year ago. Lean hog prices are about $3 per cwt. higher than last year.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2018 will average $115 per cow. That would be $43 per head less than the estimated average profit of $158 for 2017. Estimated average cow-calf margins were $173 in 2016, and $438 per cow in 2015.
For feedyards, Nalivka projects an average profit of $67 per head in 2018, which would be $169 less than the average of $236 per head in 2017. Nalivka expects packer margins to average about $135 per head in 2018, up from $120 in 2017.
For farrow-to-finish pork producers, Nalivka projects 2018 profit margins will average $4 per head, compared to $21 in 2017. Pork packers are projected to earn $19 per head in 2018, down from $25 profit per head in 2017.