Profit Tracker: Feeder Margins Tumble, Packer Margins Improve
Cattle feeding margins turned sharply lower last week as losses exceeded $174 per head. That’s $77 more than the previous week’s losses of $97 per head.
Cash cattle prices declined more than $4 per cwt., with the 5-area direct cash price at $163. That was well below the average breakeven price of $176.45, according to the Sterling Beef Profit Tracker. A year ago cattle feeders were earning $210 on every animal sold.
Beef cutout prices trended about $2.80 per cwt. higher to $256.37, and packer margins improved more than $26 per head, resulting in losses of $15 on every animal processed.
Farrow-to-finish pork margins improved nearly $7 per head, producing losses of $14.47 per head. Both beef and pork profit margins are calculated by Sterling Marketing, Vale, Ore.
The cost of feeder cattle factored against last week’s live cattle sales was about $3 per cwt. higher compared to the previous week. Feeder cattle represent more than 80% of the total cost for finishing a steer, up significantly from last year when feeder cattle represented 73% of that total cost.
A month ago beef packers were losing $34 on every animal processed, while a year ago packers were losing $63, Sterling Marketing estimates. Pork packers saw their margins decline $2 per head, with profits now at about breakeven. Cash prices for fed cattle are $13 per cwt. higher than last year, and negotiated hog prices are $64 per cwt. lower than last year.
Nalivka projects average cash profit margins for cow-calf producers at $541 per cow this year. Last year’s estimated average cow-calf margins were $548 per cow.
