Margins Narrow Between Packers, Feeders


Greg Henderson, FarmJournal's Pork

January 9, 2019


The profit margin spread between packers and feeders has narrowed. With feedyards averaging a $77 per head profit and packers at $107 per head, the spread stood at $30. Thatís a shift of more than $320 per head from last June, according to the Sterling Beef Profit Tracker.


Beef packers saw average profits of $285 per head in June of 2018 while cattle feeders lost an average of $70 on every animal shipped.


For the week ending Jan. 4, feedyard closeout profits declined $26 per head to $77 on cash prices that held steady at $123. Packer margins slipped $29 for the week to $107. The beef cutout improved nearly $1 per cwt. for the week to $214.81 per cwt. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.


A year ago cattle feeders were earning an average of $83 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 improve $8 per head, but still saw losses of $18. Lean carcass prices traded at $48.94 per cwt., $2.40 per cwt. better than the previous week, but $2.22 lower than a month ago. A year ago pork producer margins were a positive $15 per head. Pork packer margins averaged a profit of $35 per head last week...