Profit Tracker: Catastrophic Feedyard Losses
Cattle feeders hope the cash market found its bottom last week. Cash prices tumbled another $11 per cwt., which produced an astonishing drop in margins that has the industry in turmoil and some on the brink of financial collapse.
Cash fed cattle prices for the 5-area direct steers averaged $117.79 last week, and the result was a $190 per head increase in cattle feeding losses for a total per head loss of $550, according to calculations by Sterling Marketing, Vale, Ore. Cash cattle prices have declined $24 per cwt. over the past month. Beef packer margins increased $14 per head to $99.40.
A month ago cattle feeders were losing $270 per head, while a year ago profits were pegged at $200 per head, according to Sterling Marketing. Feeder cattle represent 79% of the cost of finishing a steer, significantly higher than last year’s 73%.
A month ago beef packers were earning $118 for every animal processed, while a year ago packers were losing $60, Sterling Marketing estimates.
Farrow-to-finish pork producers showed a profit margin of $19 per hog last week, an increase of $4 per head from the previous week and up $7 from a month ago.
Pork packers saw their margins improve $1 per head to $14. Negotiated prices for lean hogs were $72.85, per cwt. last week, an increase of $1.71 per cwt. from the previous week. Cash prices for fed cattle are $42 per cwt. lower than last year, and negotiated hog prices are $38 per cwt. lower than last year.
Nalivka projects average cash profit margins for cow-calf producers at $506 per cow this year. Last year’s estimated average cow-calf margins were $526 per cow. Cow-calf profits for 2016 are projected at $372 per cow.
