Profit Tracker: Steady Money

Profit Tracker: Steady Money

Anticipation of higher money left cattle feeders disappointed, but they held their profit margins near $500 last week. In fact, steady was the word all around the beef complex as packer margins at $206 per head were nearly identical to the previous week, according to the Sterling Beef Profit Tracker.

After posting a $4 to $6 rally two weeks ago, cash fed cattle prices were steady at $136 per cwt. The $490 profits feeders recorded were $8 less than the previous week, and $413 per head better than last year. Feedyards were profitable for the 29th consecutive week.

The beef cutout increased $4.25 to $244.15 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 $1,403 per head, which is $290 less than the $1,693 a year ago. A month ago cattle feeders were earning $462 per head, while a year ago profits were calculated at $77 per head. Feeder cattle represent 73% of the cost of finishing a steer, compared to 76% last year.

Farrow-to-finish pork producers earned $40 profit per hog last week, a $7 per head increase from the previous week. A month ago farrow-to-finish pork producers showed a profit of $26 per head.

Pork packers saw their margins decrease $5 per head. Negotiated prices for lean hogs were $78.76 per cwt last week, $3 per cwt higher. Cash prices for fed cattle are $9 per cwt. higher than last year and prices for lean hogs are about $1 per cwt. lower.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $111 per cow. That would be $66 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 $260 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $105 per head in 2017, down from $114 in 2016.

 

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