Profit Tracker: Cattle Improve, Pork In The Red

Cattle and hog feeding margins
Cattle and hog feeding margins
(FJ)

Average cattle feeding margins improved $18 per head last week, with closeouts showing a modest $8 per head return over breakeven. Industry-wide average cash cattle prices improved to $109 and average per head feed costs declined about $3, according to the Sterling Beef Profit Tracker.

The total cost for finishing a steer marketed last week was $1,473, about $107 less than the same week a year ago.  Cash cattle prices that were $13 per cwt. higher a year ago produced profits of about $84 per head the week between Christmas and New Year’s in 2019. This year feeder cattle represent 68.5% of the cost of finishing a steer compared with 73% a year ago.

Beef packer margins were mostly steady at $273 per head after the previous two weeks saw packer margins decline 56% from a high of $490 per head the week ending Dec. 4. The decline in packer margins corresponds with the decline in wholesale beef prices. Last week’s beef cutout price averaged about $208 per cwt., down 13% 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 fall $6 per head to a loss of $6 per head. Lean carcass prices traded at $53.49 per cwt., $1.84 lower than the previous week, and $5.88 lower than a month ago. A year ago pork producers lost an average of $18 per head. Pork packer margins averaged a profit of $30 per head last week, a $5 per head decline from the previous week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2020 will average $51 per cow. For feedyards, Nalivka projects an average loss of $3 per head in 2020, and packer margins are projected to average $300 per head.

For farrow-to-finish pork producers, Nalivka projects 2020 will produces losses of $21 per head. Pork packers are projected to earn $44 per head in 2020.

 

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