Profit Tracker: Rally Puts Feedlot Margins In The Black
Cash cattle prices rallied $3 per cwt. last week
Greg Henderson, FarmJournal's Pork
November 6, 2019
Average feedyard close-outs were printed in black ink last week for the first time in several months after a $3 per cwt. rally in cash cattle prices. Choice steers averaged $133.36 per cwt., lifting feedyard margins to an average of $40 per head, after losses of $25 per head the previous week, according to the Sterling Beef Profit Tracker.
Beef packer margins gained $52 per head on gains of nearly $8 per cwt. in the beef cutout price to $226.28 per cwt. For the week ending Nov. 2, packer margins averaged $358 per head, leaving the packer/feeder margin spread at $318, down $10 from the previous week.
A year ago cattle feeders found profits of $68 per head on closeouts the first week in November, while packers saw profits of $223, for a spread of $155.
(Note: The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs.)
Feeder cattle represent 72% of the cost of finishing a steer compared to 74% a year ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.
Farrow-to-finish pork producers saw their margins decline $12 per head, putting losses at $28 per head. Lean carcass prices traded at $51.42 per cwt., $5.52 per cwt. lower than the previous week. A year ago pork producers were at breakeven. Pork packers saw average profits of $43per head, an increase of $12 from the previous week.
Sterling Marketing president John Nalivka projects cash profit margins cow-calf producers in 2019 will average $124 per cow. That would be 13% lower...