Steady Money, Steady Losses For Feeders
Last week’s cash cattle market held steady at $111 per cwt., but feeding margins slipped an additional $17, with losses now exceeding $83 per head. Packer margins held firm at $168 profit per head, according to the Sterling Beef Profit Tracker.
The beef cutout declined $0.80 per cwt., closing at $202.34. The cost of finishing a steer last week was calculated at $1,604, which is $99 higher than the $1,505 a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
A year ago cattle feeders were losing $6 per head. Feeder cattle represent 74% of the cost of finishing a steer compared with 73% a year ago.
Farrow-to-finish pork producers saw their margins improve from breakeven levels two weeks ago to a $4 per head profit last week. Lean carcass prices traded at $65.42 per cwt., $0.58 per cwt. higher than the previous week, and $23.94 higher than a month ago. A year ago pork producers lost an average of $11 per head. Pork packer margins averaged a profit of $22 per head last week.
Cash prices for fed cattle are $2 per cwt. higher than the same week last year. Lean hog prices are about $12 per cwt. higher than last year.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2018 will average $156 per cow. That would be $2 per head less than the estimated average profit of $158 for 2017. Estimated average cow-calf margins were $173 in 2016, and $438 per cow in 2015.
For feedyards, Nalivka projects an average profit of $26 per head in 2018, which would be $155 less than the average of $181 per head in 2017. Nalivka expects packer margins to average about $140 per head in 2018, up from $120 in 2017.
For farrow-to-finish pork producers, Nalivka projects 2018 profit margins will average a loss of $5 per head in 2018, compared to profits of $21 in 2017. Pork packers are projected to earn $17 per head in 2018, down from $25 profit per head in 2017.
