Feeding Margins Improve, Packers Over $200

Cattle feeding profits improved with $1 per cwt. higher cash prices and lower feeder cattle prices calculated against last week's closeouts. ( Wyatt Bechtel )

Cattle feeders saw profit margins improve $32 to a total of $67 per head last week. Cash fed cattle prices averaged $1.30 per cwt. higher, and total costs declined $13 per head, according to the Sterling Beef Profit Tracker. Packer margins improved $5 to $223 per head on gains in the beef cutout.

The beef cutout closed at $214.34, and the cost of finishing a steer last week was calculated at $1,515, which is $73 lower than the $1,588 a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

A year ago cattle feeders were earning $116 per head. Feeder cattle represent 73% of the cost of finishing a steer compared with 75% a year ago.

Farrow-to-finish pork producers saw margins decline $1 to breakeven levels. Lean carcass prices traded at $60.45 per cwt., $1.21 per cwt. higher than the previous week, and $5 lower than a month ago. A year ago pork producers earned an average of $17 per head. Pork packer margins averaged a profit of $24 per head last week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2018 will average $156 per cow. That would be $2 per head less than the estimated average profit of $158 for 2017. Estimated average cow-calf margins were $173 in 2016, and $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $26 per head in 2018, which would be $155 less than the average of $181 per head in 2017. Nalivka expects packer margins to average about $140 per head in 2018, up from $120 in 2017.

For farrow-to-finish pork producers, Nalivka projects 2018 profit margins will average a loss of $5 per head in 2018, compared to profits of $21 in 2017. Pork packers are projected to earn $17 per head in 2018, down from $25 profit per head in 2017.