Feeders, Packer Margins Both Improve

Profit margins for both cattle feeders and beef packers improved last week, with packers gaining a slight edge. ( Wyatt Bechtel )

Profit margins for both cattle feeders and beef packers improved last week, with packers gaining a slight edge. Feedyard closeouts rose $12 per head to $94, while packer margins jumped $41 per head to $108, according to the Sterling Beef Profit Tracker.

For the week ending Jan. 25, cash cattle sold for an average of $123 per cwt., while the beef cutout closed the week at $216. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

A year ago cattle feeders were earning an average of $209 per head. Feeder cattle represent 70% of the cost of finishing a steer compared with 73% a year ago.

Farrow-to-finish pork producers saw their margins improve $5 per head, but still saw losses of $6. Lean carcass prices traded at $54.05 per cwt., $0.19 per cwt. better than the previous week, and $7.51 better than a month ago. A year ago pork producer margins were a positive $28 per head. Pork packer margins averaged a profit of $21 per head last week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2018 will average $162 per cow. That would be steady compared to the $164 estimated average profit for 2017. Estimated average cow-calf margins were $176 in 2016, and $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $41 per head in 2019, which would be $17 better than the average of $24 per head in 2018. Nalivka expects packer margins to average about $159 per head in 2019, about $10 less than in 2018.

For farrow-to-finish pork producers, Nalivka projects an average loss of $2 pere head in 2019, as compared with an average profit of $1 per head in 2018. Pork packers are projected to earn $22 per head in 2019, about $2 more than the $20 per head profits of 2018.

Related Content:

Feeding, Packer Margins Both Decline

 
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