Profit Tracker: Margins Drop $111 Per Head


By Greg Henderson, Drovers, Editorial Director

via AgWeb - November 13, 2017


Cash fed cattle prices dipped just $1 per cwt., but cattle feeding profit margins declined $111 per head last week to $57. The sharp drop in margins was largely due to an $11 per cwt. increase in the cost of feeder cattle calculated against last week’s marketings, according to the Sterling Beef Profit Tracker.


Beef packer margins also declined, an average of $6 per head to $87. Sterling Marketing president John Nalivka says it may seem odd that beef packer margin declined despite lower cattle costs and a higher cutout. “However, that margin also included cattle from the prior week (65%) as well as last week’s cattle. Therefore, the margin was not as good as last week’s cattle cost alone would suggest.”


Cash fed cattle prices averaged $123.34 per cwt., while last week’s beef cutout averaged $209.84, up $5 per cwt. from the previous week. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.


Break even prices for steers sold last week averaged $119.22 per cwt., about $7 per cwt. higher than the previous week. Cattle placed on feed last week have a projected breakeven of $120.87 per cwt.


The cost of finishing a steer last week was calculated at $1,659 per head, which is $156 more than the $1,503 a year ago. A month ago cattle feeders were earning $17 per head, while a year ago losses were calculated at $49 per head. Feeder cattle represent 75% of the cost of finishing a steer, compared to 72% last year.


Farrow-to-finish pork producers earned an average of $4 per head last week, with lean carcass prices at $62, nearly $4 lower than the previous week. A year ago pork producers lost an average of $35 per head. Pork packer margins totaled $31 per head last week, about $12 per head higher than the previous week...