Profit Tracker: Closeouts Improve $61 Per Head
Cash fed cattle prices declined 50 cents per cwt. last week, but average feedyard closeouts showed profits of nearly $90 per head, a $61 improvement over the previous week. Margin gains were the result of a $5 per cwt. decline in closeout break even prices, according to the Sterling Beef Profit Tracker.
The cost of feeder cattle calculated against last week’s marketings declined $6.60 per cwt., while feed costs dropped $14 per head, according to the weekly average calculations.
Beef packer margins improved an average of $28 per head to $120. The beef cutout declined $1.72 per cwt. to $204.81. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
Break even prices for steers sold last week averaged $112.15 per cwt., and average feed costs totaled $217 per head. Cattle placed on feed last week have a projected breakeven of $114.38 per cwt.
The cost of finishing a steer last week was calculated at $1,561 per head, which is $67 less than the $1,537 a year ago. A month ago cattle feeders were earning $168 per head, while a year ago losses were calculated at $31 per head. Feeder cattle represent 75% of the cost of finishing a steer, compared to 72% last year.
Farrow-to-finish pork producers lost an average of $2.35 per head last week, a decline of $2 per head from the previous week. Lean carcass prices traded at $58.81, a dip of $1.66 per cwt. from the previous week. A year ago pork producers lost an average of $33 per head. Pork packer margins totaled $40 per head last week, about $5 per head higher than the previous week.
Cash prices for fed cattle are $10 higher than the same week a year ago. Lean hog prices are about $15 per cwt. higher than last year.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $136 per cow. That would be $46 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 $228 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $118 per head in 2017, up from $114 in 2016.
For farrow-to-finish pork producers, Nalivka projects 2017 profit margins to average $20 per head, compared to $5 per head last year. Pork packers are projected to earn $24 per head in 2017, up slightly from $24 profit per head in 2016.
