Profit Tracker: Can It Get Any Worse?

Unfortunately, yes. Cattle feeding margins took another nosedive last week after cash fed cattle prices tumbled another $3 to $4 per cwt. to settle at $135.19. Feedyard closeouts saw another $52 added to losses already exceeding $300 per head. Calculations by Sterling Marketing, Vale, Ore., put average cattle feeding losses at $357 per head last week as feedyards ordered another barrel of red ink.

Beef packers saw their margins decline $12 per head with average profits now at $129. The beef cutout declined more than $6 per cwt. to $230.12.

A month ago cattle feeders were losing $127 per head, while a year ago profits were pegged at $186 per head, according to Sterling Marketing. Feeder cattle represent 79% of the cost of finishing a steer, significantly higher than last year’s 73%.

A month ago beef packers were earning $84 for every animal processed, while a year ago packers were losing $10, Sterling Marketing estimates.

Farrow-to-finish pork producers showed a profit margin of $11 per hog last week, an increase of $4 per head from the  previous week and down $14 from a month ago.

Pork packers saw their margins decline $6 per head to $16. Negotiated prices for lean hogs were $69.78, per cwt. last week, an increase of $1 per cwt. from the previous week. Cash prices for fed cattle are $22 per cwt. lower than last year, and negotiated hog prices are $36 per cwt. lower than last year.

Nalivka projects average cash profit margins for cow-calf producers at $546 per cow this year. Last year’s estimated average cow-calf margins were $548 per cow. Cow-calf profits for 2016 are projected at $440 per cow.