Profit Tracker: Packer Margins Near $200
A second week of declining cash cattle prices coupled with increasing beef cutout prices raised packer margins $73 to $198 per head last week, according to the Sterling Beef Profit Tracker.
Cattle feeding margins declined $75 per head, but average profits remained more than $462. The 5-area average price dipped $2.33 to $134 per cwt, but break-evens of $100.68 left feeders with their 26th consecutive week of profitability. The beef cutout increased $2.80 to $243.54 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.
The cost of finishing a steer last week was calculated at $1,402 per head, which is $131 less than the $1,533 a year ago.
A month ago cattle feeders were earning $491 per head, while a year ago profits were calculated at $286 per head. Feeder cattle represent 73% of the cost of finishing a steer, compared to 74% last year.
Farrow-to-finish pork producers earned $31 profit per hog last week, a $5 improvement from last week. A month ago farrow-to-finish pork producers showed a loss of about $5 per head.
Pork packers saw their margins increase $5 to $22 per head. Negotiated prices for lean hogs were $73.50 per cwt last week, about $2 per cwt. higher. Cash prices for fed cattle are $3 per cwt. higher than last year and prices for lean hogs are about $5 per cwt. lower.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $107 per cow. That would be $70 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 $43 per head in 2017, down from $114 in 2016.