Profit Tracker: Rally Erases Red Ink

A $3 per cwt. rally in cash fed cattle prices helped erase losses on feedyard closeouts last week.
A $3 per cwt. rally in cash fed cattle prices helped erase losses on feedyard closeouts last week.
(Wyatt Bechtel)

A $3 per cwt. rally in fed cattle prices produced a $135 per head improvement in feedyard closeouts last week, erasing a $43 per head loss and producing a $92 profit. The 5-area direct steer price was $121.78 per cwt., up from the previous week’s $119.18, according to the Sterling Beef Profit Tracker.

Closeouts also benefitted from a decrease in the cost of feeder cattle calculated against last week’s marketings. The price of feeder cattle calculated against the fed cattle sales were $153.71, or, $12.57 per cwt. lower. The cost of finishing a steer last week was calculated at $1,602, which is $236 higher than the $1,366 a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

Beef packer operating margins slipped $51 per head to $123. The beef cutout declined $1.66 per cwt. to $209.74.

A month ago cattle feeders were earning $127 per head, while a year ago profits were calculated at $461 per head. Feeder cattle represent 74% of the cost of finishing a steer compared with 72% a year ago.

Farrow-to-finish pork producers saw their margins improve slightly to a $2 per head loss, compared with losses of $18 per head last week. Lean carcass prices traded at $57.41 per cwt., a $7.03 per cwt. improvement from the previous week. A year ago pork producers lost an average of $5 per head. Pork packer margins improved $8 per head to $33.

Cash prices for fed cattle are $10 per cwt. lower than the same week a year ago. Lean hog prices are about $1 per cwt. higher than last year.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2018 will average $115 per cow. That would be $43 per head less than the estimated average profit of $158 for 2017. Estimated average cow-calf margins were $173 in 2016, and $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $67 per head in 2018, which would be $169 less than the average of $236 per head in 2017. Nalivka expects packer margins to average about $135 per head in 2018, up from $120 in 2017.

For farrow-to-finish pork producers, Nalivka projects 2018 profit margins will average $4 per head, compared to $21 in 2017. Pork packers are projected to earn $19 per head in 2018, down from $25 profit per head in 2017.

 

Latest News

NCBA Reports On Q1 Voluntary Price Discovery Framework

NCBA president Jerry Bohn said a major trigger in negotiated trade data was tripped during the first quarter of 2021, as determined by the Live Cattle Marketing Working Group Regional Triggers Subgroup.

TSCRA Disaster Relief Fund Distributes Aid

Thanks to contributions from across the U.S., Texas & Southwestern Cattle Raisers Association Disaster Relief Fund mailed checks totaling $112,750 to cattle raisers financially burdened by February’s Winter Storm Uri.

Retail Beef Sales Remain Strong During February

Sales of all food and beverage items during February were 11.8% higher than during February 2020, and the meat department was an above-average performer.

Land Grab or Climate Solution? President Biden Could Unveil '30 by 30' Plan Details Next Week

Details of a U.S. land and water related executive order could be unveiled soon. Known as the ’30 by 30’ plan, it would place 30% of U.S. lands and 30% of U.S. waters under federal jurisdiction by 2030.

Ranching by the Seat of Your Pants

Oregon rancher Alec Oliver was determined to return to ranching and working from horseback after he was paralyzed in a vehicle accident nearly a decade ago.

CRP ground rotator
Vilsack Hints at Possible CRP Changes Coming Soon with Biden's 30 By 30 Plan

CRP could be in focus again. Secretary of Agriculture Tom Vilsack said this week that he thinks greater opportunities are coming for landowners to take less productive farmland out of production and place into CRP.