Packer Windfall Continues

The $4-plus rally in cash fed cattle prices pulled feedyards out of the red, and packer margins remain at historic levels. ( Wyatt Bechtel )

Packer profits slipped $37 per head lower last week, yet margins remain in historic territory at $331. Cash fed cattle prices rallied $4-plus per cwt., pulling closeouts out of the red and up to an $18 per head profit, according to the Sterling Beef Profit Tracker.

Cash cattle prices closed at $144.66 last week, with the beef cutout at $222.73 per cwt. The cost of finishing a steer last week was calculated at $1,578, which is $163 higher than the $1,415 a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

A year ago cattle feeders were earning $478 per head. Feeder cattle represent 74% of the cost of finishing a steer compared with 72% a year ago.

Farrow-to-finish pork producers saw their margins improve $13 to a $34 per head. Lean carcass prices traded at $76.02 per cwt., a $6 per cwt. improvement from the previous week. A year ago pork producers earned an average of $40 per head. Pork packer margins slipped $9 to a loss of $3 per head.

Cash prices for fed cattle are $21 per cwt. lower than the same week a year ago. Lean hog prices are about $3 per cwt. lower than last year.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2018 will average $128 per cow. That would be $30 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 $51 per head in 2018, which would be $185 less than the average of $236 per head in 2017. Nalivka expects packer margins to average about $147 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 $1.72 per head, compared to profits of $21 in 2017. Pork packers are projected to earn $13 per head in 2018, down from $25 profit per head in 2017.



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Submitted by Mike on Wed, 06/13/2018 - 04:49

Nothing brings cattle to town like a $5 increase in prices. This week's show list expanded to 330,000 head up 30,000 head over last week. Packer inventories also expanded last week after two smaller weeks of purchases. This will likely allow them to delay purchases until late week unless some nervous sellers decide to offer bargains. Men's Black Genuine Jacket