Profit Tracker: Packer Margins Surge
Beef packers saw their margins jump $51 per head higher last week, ending with profits more than $83. Cattle feeders saw their margins dip further into the red with losses of $127 per head, according to calculations by Sterling Marketing, Vale, Ore. Choice steer prices declined $3 per cwt to $147.55.
Packers’ improving margins were due to the lower cash cattle trade and a $2.80 per cwt. rally in the beef cutout price.
A month ago cattle feeders were losing $156 per head, while a year ago profits were pegged at $162 per head, according to Sterling Marketing. Feeder cattle represent 78 % of the cost of finishing a steer, still significantly higher than last year’s 72%.
A month ago beef packers were losing $4 on every animal processed, while a year ago packers were earning $120, Sterling Marketing estimates.
Farrow-to-finish pork producers showed a profit margin of $25 per hog last week, up $2 from the previous week and up $3 from a month ago.
Pork packers saw their margins decline nearly $4 per head to a $10 per head profit. Negotiated prices for lean hogs were $78.02 per cwt. last week, up 36 cents per cwt. from the previous week.
Cash prices for fed cattle are $6 per cwt. lower than last year, and negotiated hog prices are $22 per cwt. lower than last year.
Nalivka projects average cash profit margins for cow-calf producers at $606 per cow this year. Last year’s estimated average cow-calf margins were $548 per cow. Cow-calf profits for 2016 are projected at $490 per cow.
