Profit Tracker: Margins Exceed $150 Per Head
Cattle feeding profits more than doubled last week, a bounce due to a $3 rally in cash fed cattle prices as 2017 came to a close. Average closeouts showed profits of $150 per head, up from $65 the previous week, according to the Sterling Beef Profit Tracker.
The 5-area direct cash price was $123 per cwt., while break evens declined $3 to $112.08. The cost of feeder cattle calculated against last week’s marketings declined $4.74 per cwt., while feed costs declined $3 per head, according to the weekly average calculations.
Beef packer margins increased $10 per head to average $52. The beef cutout increased $2.76 per cwt. to $200.34. 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 $1,560 per head, which is $79 more than the $1,481 a year ago. A month ago cattle feeders were earning $131 per head, while a year ago profits were calculated at $157 per head. Feeder cattle represent 74% of the cost of finishing a steer, compared to 75% last year.
Farrow-to-finish pork producers saw their margins improve $4 per head to $4.41. Margins were at breakeven the previous week. Lean carcass prices traded at $59.25, an increase of $1.84 per cwt. from the previous week. A year ago pork producers lost an average of $8 per head. Pork packer margins totaled $30 per head last week, a decline of $3 per head.
Cash prices for fed cattle are $5 per cwt. higher than the same week a year ago. Lean hog prices are about $5 per cwt. higher than last year.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 averaged $143 per cow. That would be $34 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 $236 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $119 per head in 2017, up from $114 in 2016.
For farrow-to-finish pork producers, Nalivka projects 2017 profit margins averaged $21 per head, compared to $5 per head last year. Pork packers are projected to earn $25 per head in 2017, up slightly from $24 profit per head in 2016.
