Profit Tracker: Feeder, Packer Margins Slip
Cattle feeding and packer profit margins both declined last week as cash cattle prices were modestly lower. Cattle feeders eared $31 per head, $68 less than the previous week, while packer margins dipped $8 per head to $137, according to the Sterling Beef Profit Tracker. Cash cattle prices were $118.30, about 60 cents per cwt. lower.
The beef cutout was nearly steady at $211.38. The cost of finishing a steer last week was calculated at $1,590, which is $59 higher than the previous week and $8 higher than the same week a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
A year ago cattle feeders were earning an average of $60 per head. Feeder cattle represent 71% of the cost of finishing a steer compared with 73% a year ago.
Farrow-to-finish pork producers saw their margins slip $6 to average losses of $26 per head. Lean carcass prices traded at $48.24 per cwt., $2.9 per cwt. lower than the previous week, and $4.69 lower than a month ago. A year ago pork producer margins were at breakeven. Pork packer margins averaged a profit of $43 per head last week.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2018 will average $162 per cow. That would be steady compared to the $164 estimated average profit for 2017. Estimated average cow-calf margins were $176 in 2016, and $438 per cow in 2015.
For feedyards, Nalivka projects an average profit of $21 per head in 2018, which would be $160 less than the average of $181 per head in 2017. Nalivka expects packer margins to average about $168 per head in 2018, up from $120 in 2017.
For farrow-to-finish pork producers, Nalivka projects 2018 profit margins will average a profit of $2.50 per head in 2018, compared to profits of $21 in 2017. Pork packers are projected to earn $19 per head in 2018, down from $25 profit per head in 2017.
