Profit Tracker: Cattle Margins Positive, Pork In The Red

Hog and cattle feeding
Hog and cattle feeding

Average cattle feeding margins improved $20 per head last week, with closeouts showing a modest $28 per head return over breakeven. Industry-wide average cash cattle prices improved to $111 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 $1,487, about $51 less than the same week a year ago.  Cash cattle prices that were $13 per cwt. higher a year ago produced profits of about $151 per head the first week of the New Year. This year feeder cattle represent 66% of the cost of finishing a steer compared with 73% a year ago.

Beef packer margins declined 17%, with profits of $231 per head last week. Packer margins have declined $259 per head the past month after posting margins of $490 the first week of December.

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 $3 per head to a loss of $9 per head. Lean carcass prices traded at $52.56 per cwt., $0.93 lower than the previous week, and $6 lower than a month ago. A year ago pork producers lost an average of $14 per head. Pork packer margins averaged a profit of $39 per head last week, a $9 per head increase from 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 average profits of $83 per head in 2021, and packer margins are projected to average $270 per head.

For farrow-to-finish pork producers, Nalivka projects 2021 will produces profits of $5 per head. Pork packers are projected to earn $40 per head in 2021.


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