Profit Tracker: Cattle, Hog Margins In The Red
Average cattle feeding margins declined $60 per head last week, leaving closeouts at negative $17. Over the previous month cattle feeding margins had shown modest profits. Industry-wide average cash cattle prices declined about $2 per cwt. last week to $109 and average per head feed costs increased about $35 per head, according to the Sterling Beef Profit Tracker.
The total cost for finishing a steer marketed last week was $1,500, about $50 less than the same week a year ago. Cash cattle prices were $15 per cwt. higher a year ago and produced profits of about $137 per head the second full week of January 2020. This year feeder cattle represent 66% of the cost of finishing a steer compared with 72% a year ago.
Beef packer margins posted $49 per head gains to a weekly average of $206 per head. Packer margins the same week a year ago were $38 per head. Improving packer margins corresponds with a $4 per cwt. gain in wholesale beef prices to $209, which is down about 12% from the $238 per cwt. reported the week ending Dec. 4. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
Farrow-to-finish pork producers saw their margins improve $2 per head but remain in the red at $6 per head. Lean carcass prices traded at $55.88 per cwt., $1.47 higher than the previous week, and $2.61 lower than a month ago. A year ago pork producers lost an average of $11 per head. Pork packer margins averaged a profit of $42 per head last week, about steady with the previous week.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2021 will average $123 per cow. For feedyards, Nalivka projects an average profit of $43 per head in 2021, and packer margins are projected to average $251 per head.
For farrow-to-finish pork producers, Nalivka projects 2021 will produces losses of $13 per head. Pork packers are projected to earn $37 per head in 2021.
