Profit Tracker: Cattle Feeding Margins Inch Higher

Cattle feeding margins have rebounded in recent weeks. ( Fj )

Cattle feeding margins climbed $12 higher to total an average of $61 per head for the week ending August 2. The increase came despite the fact average cash cattle prices were mostly steady at $115. Packer margins improved $5 per head at $163, according to the Sterling Beef Profit Tracker.

(Note: The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs.)

A year ago cattle feeders were losing an average of $53 per head on cash prices of $113. Feeder cattle represent 71% of the cost of finishing a steer compared to 73% a year ago.

The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

Farrow-to-finish pork producers saw their margins decline $9 per head with profits of $42. Lean carcass prices traded at $80.38 per cwt., $4.34 per cwt. higher than the previous week. A year ago pork producer margins were negative $3 per head. Pork packers saw average profits of $4 per head, $18 better than the previous week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2019 will average $138 per cow. That would be 14% lower compared to the $161 estimated average profit for 2018. Estimated average cow-calf margins were $164 in 2017, $176 in 2016, and $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $62 per head in 2019, which would be $38 better than the average of $24 per head in 2018. Nalivka expects packer margins to average about $155 per head in 2019, about $11 less than in 2018.

For farrow-to-finish pork producers, Nalivka projects an average profit of $13 per head in 2019, as compared with an average profit of $1.35 per head in 2018. Pork packers are projected to earn $16 per head in 2019, about $4 less than the $20 per head profits of 2018.

Related stories:

Feeder Cattle Higher, Feds Steady To $1 Lower

 
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