Profit Tracker: Steady Money, Eroding Profits
Despite steady cash prices at $114, cattle feeding margins declined another $36 per head last week, leaving closeouts just $22 in the black, according to the Sterling Beef Profit Tracker. Packer margins slipped a modest $14 per head, but remain at $205 the final full slaughter week before Thanksgiving.
The beef cutout was steady declined $3.35 per cwt. to $221.28. The cost of finishing a steer last week was calculated at $1,541, which is $142 lower than the $1,683 a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
A year ago cattle feeders were losing an average of $50 per head. Feeder cattle represent 72% of the cost of finishing a steer compared with 74% a year ago.
Farrow-to-finish pork producers saw their margins decline from a $6 loss two weeks ago to a loss of $13 per head last week. Lean carcass prices traded at $52.93 per cwt., $4.37 per cwt. lower than the previous week, and $8.48 lower than a month ago. A year ago pork producer margins were at breakeven. Pork packer margins averaged a profit of $25 per head last week.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2018 will average $165 per cow. That would be steady compared to the $164 estimated average profit for 2017. Estimated average cow-calf margins were $176 in 2016, and $438 per cow in 2015.
For feedyards, Nalivka projects an average profit of $22 per head in 2018, which would be $159 less than the average of $181 per head in 2017. Nalivka expects packer margins to average about $165 per head in 2018, up from $120 in 2017.
For farrow-to-finish pork producers, Nalivka projects 2018 profit margins will average a loss of $3 per head in 2018, compared to profits of $21 in 2017. Pork packers are projected to earn $19 per head in 2018, down from $25 profit per head in 2017.
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