Profit Tracker: Feeding Margins Continue Decline
Based on average cash sales of $108.77 for the week ending March 15, cattle feeders lost an average of $90 per head on a cash basis. That’s roughly $150 lower than the $62 profit found the previous week. Packer margins were calculated at $175 per head the week ending March 15, an increase of $34, according to the Sterling Beef Profit Tracker.
Cash cattle prices were $4 lower than the previous week, and $10 lower than the previous month.
The packer/feeder margin spread for the week ending March 15 was $265 per head in favor of packers.
A year ago cattle feeders found cash profits of $70 per head on closeouts the second week in March, while packers saw profits of $121. (Note: The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs.)
Feeder cattle represent 71% of the cost of finishing a steer compared to 72% a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
Farrow-to-finish pork producers saw their margins improve nearly $8 per head, yet losses remain at $7. Lean carcass prices traded at $55.65 per cwt., $4.06 per cwt. higher than the previous week. A year ago pork producers were losing $12 per head. Pork packers saw average profits of $20 per head, steady with the previous week.
Sterling Marketing president John Nalivka projects cow-calf profit margins of $142 per cow in 2020, or $24 per cow better than 2019. Estimated average cow-calf margins were $162 in 2018, $164 in 2017, $176 in 2016, and $438 per cow in 2015.
For feedyards, Nalivka calculates an average profit of $60 for 2020, or $21 per head better than the estimated $39 per head in 2019. Average profits per head were estimated at $24 in 2018, and $181 in 2017. Nalivka said packer margins averaged about $206 per head in 2019, and he projects average profits of $163 per head for packers in 2020.
