Profit Tracker: Margins Remain In ICU
Last week saw dramatic improvement in cattle feeding margins, yet triple-digit losses remain. Feedyard closeouts were $71 per head better than the week before, leaving losses at $112 on every animal sold.
The 5-area direct cash cattle price was $159.54 per cwt., well below the average breakeven price of $168.22, according to the Sterling Beef Profit Tracker. A year ago cattle feeders were earning $157 per head.
Beef cutout prices traded $1 per cwt. higher than the previous week at $260.47, and packer margins improved $22 per head, resulting in average profits of nearly $88 on every animal processed.
Farrow-to-finish pork margins improved more than $3 per head, producing profits of $31 per head. Negotiated lean hog carcass prices declined $0.96 per cwt. to $81.69. Both beef and pork profit margins are calculated by Sterling Marketing, Vale, Ore.
The cost of feeder cattle factored against last week’s live cattle sales was down $12 per cwt. compared to the previous week. Feeder cattle represent more than 79% of the total cost for finishing a steer, up significantly from last year when feeder cattle represented 73% of that total cost.
A month ago beef packers were earning $65 on every animal processed, while a year ago packers were earning $20, Sterling Marketing estimates. Pork packers saw their margins improve $10 per head, bringing the estimated margins back to near breakeven. Cash prices for fed cattle are $14 per cwt. higher than last year, and negotiated hog prices are $29 per cwt. lower than last year.
Nalivka projects average cash profit margins for cow-calf producers at $541 per cow this year. Last year’s estimated average cow-calf margins were $548 per cow.
