Profit Tracker: Margins Improve As Prices Rally

Cattle feeding margins improved $16 per head as average cash fed cattle prices gained $2.50 last week. Average closeouts saw margins of $38 for cattle feeders, and packer margins slipped $8 per head to $198, according to the Sterling Beef Profit Tracker.

The beef cutout was steady at $221.35. The cost of finishing a steer last week was calculated at $1,559, which is $95 lower than the $1,654 a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

A year ago cattle feeders were losing an average of $28 per head. Feeder cattle represent 72% of the cost of finishing a steer compared with 74% a year ago.

Farrow-to-finish pork producers saw their margins hold steady with losses of $13 per head. Lean carcass prices traded at $53.16 per cwt., steady with the previous week, and $6.48 lower than a month ago. A year ago pork producers were losing about $3 per head. Pork packer margins averaged a profit of $20 per head last week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2018 will average $165 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 $22 per head in 2018, which would be $159 less than the average of $181 per head in 2017. Nalivka expects packer margins to average about $165 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 $3 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.

Related articles on Drovers:

Profit Tracker: Steady Money, Eroding Profits

Feeding Margins Improve, Packers Over $200