Profit Tracker: Margins Retreat On Lower Prices


by Greg Henderson, AgWeb 

Feb 05, 2020


Cattle feeding margins slipped $24 per head the week ending Jan. 31 as cash fed cattle prices fell $2. Average feedyard closeouts found profits of $185 per head, according to the Sterling Beef Profit Tracker.


Beef packer margins declined $6 per head to an average of $70. The packer/feeder margin spread for the week ending Jan. 31 narrowed to $115 per head in favor of feedyards. The packer/feeder margin spread reached a record high the week ending September 13, 2019, about a month after the Tyson fire. That week saw the packer/feeder margin spread reach $618 per head, in favor of packers, as cattle feeders lost $203 per head and beef packers saw profits of $415 per head.


The difference between the $618 advantage for packers in September and the $115 advantage for feedyards last week represents a $733 swing in the packer/feeder margin spread over the past five months. 


A year ago cattle feeders found profits of $102 per head on closeouts the third week in January, while packers also saw profits of $102. (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 71% of the cost of finishing a steer compared to 71% 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 improve $6 per head to losses of $6. Lean carcass prices traded at $56.59 per cwt., $2.58 per cwt. better than the previous week. A year ago pork producers were losing $11 per head. Pork packers saw average profits of $26 per head, a decrease of $17 per head from the previous week...


more, including links to Sterling Beef & Pork Profit Trackers