Profit Tracker: August Agony, But Margins Survive

Profit Tracker: August Agony, But Margins Survive

Cattle feeding margins shed another $38 per head last week as cash fed cattle prices dipped $2 per cwt. Yet, average cash cattle feeding profits remain more than $235 per head, the 37th consecutive week of feedyard profitability. Packer margins slipped $22 per head to $110, according to the Sterling Beef Profit Tracker.

Average fed steer prices were $115.15 last week, with a beef cutout price of $200.58 per cwt. Break even prices for steers sold last week averaged $98.16 per cwt., $1 higher than the previous week. However, cattle placed on feed last week have a projected breakeven of $106.70 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

The cost of finishing a steer last week was calculated at $1,367 per head, which is $367 less than the $1,614 a year ago. A month ago cattle feeders were earning $282 per head, while a year ago profits were calculated at $47 per head. Feeder cattle represent 72% of the cost of finishing a steer, compared to 75% last year.

Farrow-to-finish pork producers earned $51 profit per hog last week, a $2 per head decrease from the previous week. A month ago farrow-to-finish pork producers showed a profit of $65 per head.

Pork packers saw their margins decline $2 per head to $20. Negotiated prices for lean hogs were $81.75 per cwt., a $1 decline. Cash prices for fed cattle are $4 lower than last year, and prices for lean hogs are about $17 per cwt. higher.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $126 per cow. That would be $51 per head less than the estimated average profit of $177 for 2016. Estimated average cow-calf margins were $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $230 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $100 per head in 2017, down from $114 in 2016.

For farrow-to-finish pork producers, Nalivka projects 2017 profit margins to average $29 per head, compared to $5 per head last year. Pork packers are projected to earn $19 per head in 2017, down slightly from $24 profit per head in 2016.

 

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