Profit Tracker: Packer/Feeder Margin Spread Narrows

Cattle feeding losses declined with higher cash sales. ( FJ )

The $2 rally in cash cattle last week help reduce cattle feeding losses $39 per head, leaving the cash margins at negative $164 per head. Packer margins saw a $28 per head reduction, leaving profits at $386 per head, according to the Sterling Beef Profit Tracker. The same week a year ago Sterling estimated feedyard losses at $48 per head while packer profits were $173.  

(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 72% of the cost of finishing a steer compared to 71% 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 average losses of $28. Lean carcass prices traded at $47.10 per cwt., $2.63 per cwt. lower than the previous week. A year ago pork producer margins were negative $11 per head. Pork packers saw average profits of $35 per head, steady with 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 $54 per head in 2019, which would be $30 better than the average of $24 per head in 2018. Nalivka expects packer margins to average about $174 per head in 2019, about $5 higher than in 2018.

For farrow-to-finish pork producers, Nalivka projects an average profit of $11 per head in 2019, as compared with an average profit of $1.35 per head in 2018. Pork packers are projected to earn $12 per head in 2019, about $8 less than the $20 per head profits of 2018.

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Packer/Feeder Margin Now Exceeds $600 Per Head

 
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