Profit Tracker: Feeder, Packer Margins Steady

Cattle feeding and packer profit margins were mostly steady the week ending December 21, with cash prices for fed cattle slightly higher.
Cattle feeding and packer profit margins were mostly steady the week ending December 21, with cash prices for fed cattle slightly higher.
(Wyatt Bechtel)

Cattle feeding and packer profit margins were mostly steady the week ending December 21, with cash prices for fed cattle slightly higher. Cattle feeders saw average profits of $31 per head, down les than $1 from the previous week. Packer margins averaged $141 per head, an increase of $4 per head, according to the Sterling Beef Profit Tracker. Cash cattle prices were $119, about 70 cents per cwt. higher.

The beef cutout was nearly steady at $211.62. The cost of finishing a steer last week was calculated at $1,600, which is $10 higher than the previous week and $5 higher than the same week a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

A year ago cattle feeders were earning an average of $48 per head. Feeder cattle represent 71% of the cost of finishing a steer compared with 73% a year ago.

Farrow-to-finish pork producers saw their margins slip $1 to average losses of $27 per head. Lean carcass prices traded at $46.71 per cwt., $1.53 per cwt. lower than the previous week, and $6.45 lower than a month ago. A year ago pork producer margins were at breakeven. Pork packer margins averaged a profit of $43 per head last week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2018 will average $162 per cow. That would be steady compared to the $164 estimated average profit for 2017. Estimated average cow-calf margins were $176 in 2016, and $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $21 per head in 2018, which would be $160 less than the average of $181 per head in 2017. Nalivka expects packer margins to average about $168 per head in 2018, up from $120 in 2017.

For farrow-to-finish pork producers, Nalivka projects 2018 profit margins will average a profit of $2.50 per head in 2018, compared to profits of $21 in 2017. Pork packers are projected to earn $19 per head in 2018, down from $25 profit per head in 2017.

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