Profit Tracker: Back In The Black, Barely
Cattle feeders earned an average of $10 per head on cattle shipped to market last week. That represents a rebound of $23 per head after recording losses of $13 per head the prior week. Erasing the red ink from closeouts was the result of a $2 per cwt. rally in cash fed cattle prices, according to the Sterling Beef Profit Tracker.
Beef packers saw their margins decline $16 per head, but held on to very strong positive margins of $165 per head. Last week’s beef cutout price was $196, steady with the previous week.
Break even prices for steers sold last week averaged $110.37 per cwt., also steady with the previous week. However, cattle placed on feed last week have a projected breakeven of $116.41 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 $1,536 per head, which is $31 more than the $1,505 a year ago. A month ago cattle feeders were earning $44 per head, while a year ago losses were calculated at $89 per head. Feeder cattle represent 75% of the cost of finishing a steer, compared to 73% last year.
Farrow-to-finish pork producers lost an average of $4 per head last week, with lean carcass prices at $57.92. A year ago pork producers lost an average of $38 per head. Pork packer margins totaled $25 per head last week, about $7 per head lower than the previous week.
Cash prices for fed cattle are $10 higher than the same week a year ago. Lean hog prices are about $8 per cwt. lower than last year.
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.
