Profit Tracker: Feeding Margins Slip Into The Red
Average cattle feeding margins declined $20 per head last week, eroding $10 per head profits the previous week into a $10 loss. The losses marked the end of 12 consecutive weeks of average positive margins for fed cattle, according to the Sterling Beef Profit Tracker.
Industry-wide average cash cattle prices declined about 50 cents per cwt. to $105.50. The total cost for finishing a steer averaged $1,446, or about $15 per head more than the previous week.
Beef packers saw another significant decline to their profit margins – 20%. That comes on the heels of a 33% decline the previous week. Yet, packers still found profits of $268 per head, which compares to $332 the previous week and $440 a month ago.
Packers saw their margins shrink due to an $11 per cwt. decline in the beef cutout, which averaged $206.51. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
Cash cattle prices were about $15 per cwt. lower than the same week a year ago. The beef cutout price was about $4 lower than the same week a year ago.
A year ago cattle feeders were earning $53 per head. Feeder cattle represent 69% of the cost of finishing a steer compared with 73% a year ago.
Farrow-to-finish pork producers saw their margins fall $5 per head to $1.60 profit per head. Lean carcass prices traded at $55.33 per cwt., a decline of $1.97 per cwt. from the previous week, and $5.27 lower than a month ago. A year ago pork producers lost an average of $20 per head. Pork packer margins averaged a profit of $35 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 profit of $0 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 $18 per head. Pork packers are projected to earn $48 per head in 2020.
