Profit Tracker: Feedyard Margins Improve $16

Cattle feeding margins improved $16 per head last week as cash prices improved less than $1 per cwt. Industry average profit margins on cattle sold last week were $84 per head, according to the Sterling Beef Profit Tracker.

For the week ending April 12, cash cattle sold for an average of $125.07 per cwt., while the beef cutout closed the week at $227.56 up $2.08 from April 5. Packers saw profits of $180 per head last week, $24 higher than the previous week. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

A year ago cattle feeders were losing an average of $37 per head. Feeder cattle represent 73% of the cost of finishing a steer compared with 75% a year ago.

Farrow-to-finish pork producers saw their margins fall $1 per head with profits of $38 per head. Lean carcass prices traded at $77.87 per cwt., $0.51 per cwt. lower than the previous week, and $24.04 higher than a month ago. A year ago pork producer margins were negative $18 per head. Pork packer margins averaged a profit of $4 per head last week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2019 will average $144 per cow. That would be modestly lower compared to the $161 estimated average profit for 2018. Estimated average cow-calf margins were $164 in 2017, $176 in 2016, and $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $77 per head in 2019, which would be $53 better than the average of $24 per head in 2018. Nalivka expects packer margins to average about $156 per head in 2019, about $14 less than in 2018.

For farrow-to-finish pork producers, Nalivka projects an average loss of $14.60 per head in 2019, as compared with an average profit of $1.35 per head in 2018. Pork packers are projected to earn $21 per head in 2019, about $3 less than the $20 per head profits of 2018.