Feeding Margins Trend Higher With Rally

Cash cattle prices improved $1 per cwt., helping lift feeding margins to $118 per head, according to the Sterling Beef Profit Tracker. ( Wyatt Bechtel )

Profit margins for both cattle feeders and beef packers were solidly profitable last week, with feedyard closeouts improving $16 per head to $118. Packer margins slipped $13 per head, but remain near $100, according to the Sterling Beef Profit Tracker.

For the week ending Feb. 8, cash cattle sold for an average of $125 per cwt., $1 higher, 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 $175 per head. Feeder cattle represent 71% of the cost of finishing a steer compared with 73% a year ago.

Farrow-to-finish pork producers saw their margins decline $2 per head, with losses at $13. Lean carcass prices traded at $51.58 per cwt., $1.26 per cwt. lower than the previous week, and $1.48 lower than a month ago. A year ago pork producer margins were a positive $34 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: