Profit Tracker: Packer, Feeder Margins Are Polar Opposites

 

Greg Henderson, Drovers

June 4, 2019

 

Profit margins for cattle feeders and beef packers are trending in opposite directions. No surprise there, but the spread between the two is widening rapidly, and rising corn prices may quickly consume any meager remaining feedyard profits.

 

Cash fed cattle prices held steady at $115 for the week ending May 31, but average cattle feeding margins dipped $41 per head to a meager $28 profit. Packers saw their margins improve $33 per head to $236, according to the Sterling Beef Profit Tracker.

 

The beef cutout rose $2.65 per cwt. to close at $220.96. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

 

A year ago cattle feeders were losing an average of $77 per head. Feeder cattle represent 69% of the cost of finishing a steer compared with 70% a year ago.

 

Farrow-to-finish pork producers saw their margins decline $7 per head with profits of $42. Lean carcass prices traded at $79.83 per cwt., $3.19 per cwt. lower than the previous week, and $3.16 lower than a month ago. A year ago pork producer margins were positive $21 per head. Pork packer margins averaged a loss of $0.32 per head last week.

 

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2019 will average...

 

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