Profit Tracker: Feeding Margins Improve $100 Per Head

A rally in fed cattle prices helped erase $100 of red ink from feedyard closeouts the week ending August 8, leaving per head losses at $58, according to the Sterling Beef Profit Tracker. Negotiated cash cattle prices averaged $102.38 per cwt. on the week, about $3 higher than the previous week.

Packer margins were estimated at $286 per head, about even with the previous week. The Choice beef cutout price averaged $202.78 per cwt., about $2 higher than the previous week. Feedyard margins reported by the Sterling Profit Tracker are calculated on a cash basis only with no adjustment for risk management practices.

A year ago cattle feeders found cash profits of $24 per head on closeouts the first week of August, while packers saw profits of $182. (Note: The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs.)

Feeder cattle represent 74% of the cost of finishing a steer compared to 70% 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 improve $13, with $30 per head losses. Lean carcass prices traded at $44.31 per cwt. A year ago pork producers earned $42 per head profit. Pork packers saw average profits of $42 per head, about $18 per head lower than the previous week.

(Editor’s note: Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)

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