Profit Tracker: Another Retreat
Cash fed cattle prices retreated $7.77 per cwt. last week. As a result, closeouts added another $75 of red ink. It was a disappointing setback, as closeouts were as close to break even as they had been in more than a year.
When the dust settled last week, feedyards were losing an average of $123 on every animal sold, according to the Sterling Beef Profit Tracker. The week before saw losses of just $48 per head.
USDA’s 5-area cash cattle prices closed at $126.29, compared to $134.06 the week before. Average break evens were $135.75, about $2 per cwt. lower than the previous week.
Feeder cattle prices averaged $173.94 per cwt. against the fed cattle sold last week, according to John Nalivka, Sterling Marketing, Vale, Ore. The total cost of finishing cattle marketed last week was $1,772.75 per head, $26 per head lower than the previous week.
Beef packer margins improved $45 per head, earning profits of $112 per animal. Packer margins are about $53 per head higher than a month ago.
Sterling Marketing estimates feedyards lost a cumulative unhedged $4.7 billion in 2015, with average weekly losses of $239.26 per head. That compares to an unhedged profit of $3.9 billion in 2014, and losses of $1.1 billion in 2013.
A month ago cattle feeders were losing $186 per head, while a year ago feedyard closeouts were $206 in the red, according to Sterling Marketing. Feeder cattle represent 76% of the cost of finishing a steer, compared with 80% a year ago.
A month ago beef packers were earning $59 for every animal processed, while a year ago packers were earning $65 per head, Sterling Marketing estimates.
Farrow-to-finish pork producers found profits of $10 per hog last week, up about $6 per head from the previous week.
Pork packer margins were unchanged at $16 profit per hog. Negotiated prices for lean hogs were $67.39, about $2.30 per cwt. higher than the previous week. Cash prices for fed cattle are $33 per cwt. lower than last year, and negotiated hog prices are $2 per cwt. higher than last year.
Sterling Marketing projects 2016 average cash profit margins for cow-calf producers at $233 per cow. Last year’s estimated average cow-calf margins were $432 per cow. Cow-calf profits for 2014 were estimated at $517 per cow.
