Profit Tracker: Feeding Margins Improve 30%
Last week’s $2 per cwt. rally in cash fed cattle prices helped feedyard closeouts improve nearly $100 per head. Losses, however, remain at $224per head, according to the Sterling Beef Profit Tracker. USDA’s 5-area direct cash price was $133.93 per cwt.
Closeouts also benefited from a $9 per cwt. decline in the cost of the feeder cattle that factored into last week’s profitability. The price of feeders against last week’s closeouts was $197.72, or about $70 per head less than the week before, according to calculations by John Nalivka, Sterling Marketing, Inc., Vale, Ore. The total cost of finishing cattle marketed last week was $1,973 per head.
Beef packer margins have declined significantly over the past month, falling $15 last week to a per head profit of $17. Packer margins, however, are about $118 per head lower than last month.
Sterling Marketing estimates feedyards lost a cumulative unhedged $4.7 billion in 2015, with average weekly losses of $239.26 per head. That compares to an unhedged profit of $3.9 billion in 2014, and losses of $1.1 billion in 2013.
A month ago cattle feeders were losing $347 per head, while a year ago feedyard closeouts were $105 in the red, according to Sterling Marketing. Feeder cattle represent 78% of the cost of finishing a steer.
A month ago beef packers were earning $135 for every animal processed, while a year ago packers were losing $96 per head, Sterling Marketing estimates.
AgDay: Cash Prices Rally
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Farrow-to-finish pork producers found profits of $3.20 per hog last week, a $1.50 per head improvement from the previous week, and $19 per head better than the $16 per head loss found a month ago.
Pork packers saw a $2 decline in profit margins to $9 per head. Negotiated prices for lean hogs were $65.73 per cwt. last week, a gain of $0.63 per cwt. from the previous week. Cash prices for fed cattle are $25 per cwt. lower than last year, and negotiated hog prices are $6 per cwt. higher than last year.
Sterling Marketing projects 2016 average cash profit margins for cow-calf producers at $237 per cow. Last year’s estimated average cow-calf margins were $429 per cow. Cow-calf profits for 2014 were estimated at $526 per cow.
Beef Cut Prices Down in Early 2016, Low Prices Expected to Spur Demand
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