Profit Tracker: Margins Lower On Soft Cash

Cattle feeding margins declined $37 per head on a $2 retreat in fed cattle prices. ( FJ )

Cattle feeding margins declined $37 to total an average of $24 per head for the week ending August 9, 2019. The decline was the result of a $2 retreat in average cash cattle prices which traded at $113. Packer margins improved $27 per head to $192, 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 $32 per head on cash prices of $112. Feeder cattle represent 72% of the cost of finishing a steer compared to 72% 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 $7 per head with profits of $36. Lean carcass prices traded at $77.03 per cwt., $3.35 per cwt. lower than the previous week. A year ago pork producer margins were negative $27 per head. Pork packers saw average profits of $15 per head, $11 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.

 
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