Profit Tracker: Feedyard Margins Improve $43

Cattle feeding margins improved $43 per head last week as cash prices gained nearly $2 per cwt.
Cattle feeding margins improved $43 per head last week as cash prices gained nearly $2 per cwt.
(Sara Brown)

Cattle feeding margins improved $43 per head last week as cash prices gained nearly $2 per cwt. Industry average profit margins on cattle sold last week were $127 per head, according to the Sterling Beef Profit Tracker.

For the week ending April 19, cash cattle sold for an average of $126.78 per cwt., while the beef cutout closed the week at $230.80 up $3.24 from April 12. Packers saw profits of $194 per head last week, $14 higher than the previous week. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

A year ago cattle feeders were losing an average of $44 per head. Feeder cattle represent 73% of the cost of finishing a steer compared with 72% a year ago.

Farrow-to-finish pork producers saw their margins improve $5 per head with profits of $43 per head. Lean carcass prices traded at $80.99 per cwt., $3.12 per cwt. higher than the previous week, and $16.68 higher than a month ago. A year ago pork producer margins were negative $2 per head. Pork packer margins averaged a profit of $4 per head last week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2019 will average $144 per cow. That would be modestly lower compared to the $161 estimated average profit for 2018. Estimated average cow-calf margins were $164 in 2017, $176 in 2016, and $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $77 per head in 2019, which would be $53 better than the average of $24 per head in 2018. Nalivka expects packer margins to average about $156 per head in 2019, about $14 less than in 2018.

For farrow-to-finish pork producers, Nalivka projects an average loss of $14.60 per head in 2019, as compared with an average profit of $1.35 per head in 2018. Pork packers are projected to earn $21 per head in 2019, about $3 less than the $20 per head profits of 2018.

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