Both cattle feeding and packer margins improved last week, even as cash fed cattle prices dipped another $1 per cwt. Feedyard margins gained $11 per head for an average profit of $69, while packer margins improved $40 per head to $204, according to the Sterling Profit Tracker.
For the week ending May 24, cash cattle sold for an average of $115.30 per cwt., while the beef cutout closed the week at $218.31, up $0.31 from May 17. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
A year ago cattle feeders were losing an average of $80 per head. Feeder cattle represent 71% of the cost of finishing a steer compared with 70% a year ago.
Farrow-to-finish pork producers saw their margins decline $1 per head with profits of $49. Lean carcass prices traded at $83.02 per cwt., $1.62 per cwt. higher than the previous week, and $0.47 lower than a month ago. A year ago pork producer margins were positive $17 per head. Pork packer margins averaged a loss of $5 per head last week.
Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2019 will average $153 per cow. That would be modestly 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 $72 per head in 2019, which would be $48 better than the average of $24 per head in 2018. Nalivka expects packer margins to average about $167 per head in 2019, about $2 less than in 2018.
For farrow-to-finish pork producers, Nalivka projects an average profit of $17.50 per head in 2019, as compared with an average profit of $1.35 per head in 2018. Pork packers are projected to earn $15 per head in 2019, about $5 less than the $20 per head profits of 2018.
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