Rally Pulls Feeders To Black, Packers Over $200

Despite paying $40 to $50 per head more for live cattle last week, packer margins improved to more than $200 per head. ( Wyatt Bechtel )

Last week’s $3 cash fed cattle rally improved cattle feeding closeouts $79 per head, leaving owners with profit margins of $36 per head, according to the Sterling Beef Profit Tracker. Higher prices along with feeder cattle costs $24 per head lower provided the week’s final margin. Despite paying more for live cattle, packer margins improved $40 per head to $223.

The beef cutout gained $5.76 per cwt., closing at $209.25. The cost of finishing a steer last week was calculated at $1,528, which is $25 lower than the $1,553 a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

A year ago cattle feeders were earning $65 per head. Feeder cattle represent 74% of the cost of finishing a steer compared with 74% a year ago.

Farrow-to-finish pork producers saw steady margins with a loss of $1.20 per head. Lean carcass prices traded at $59.64 per cwt., $1.77 per cwt. lower than the previous week, and $5.20 lower than a month ago. A year ago pork producers earned an average of $18 per head. Pork packer margins averaged a profit of $28 per head last week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2018 will average $156 per cow. That would be $2 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 $26 per head in 2018, which would be $155 less than the average of $181 per head in 2017. Nalivka expects packer margins to average about $140 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 $5 per head in 2018, compared to profits of $21 in 2017. Pork packers are projected to earn $17 per head in 2018, down from $25 profit per head in 2017.