Profit Tracker: Mid-Winter Margins

Feedyard closeouts are profitable.

 

Greg Henderson, Drovers 

February 11, 2020

 

Cattle feeders and beef packers are both experiencing modest mid-winter profits.

 

For the week ending Feb. 7, 2020, average feedyard closeout saw profits of $143 per head, down about $42 per head from the previous week on cash prices that were $1 lower at $121. Beef packer profits averaged $73 per head, according to the Sterling Beef Profit Tracker.

 

The packer/feeder margin spread for the week ending Feb. 7 narrowed to $70 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 $70 advantage for feedyards last week represents a $688 swing in the packer/feeder margin spread over the past six months.

 

A year ago cattle feeders found profits of $119 per head on closeouts the first week in February, while packers saw profits of $87. (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 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 decline $10 per head to losses of $16. Lean carcass prices traded at $52.49 per cwt., $4.10 per cwt. lower than the previous week. A year ago pork producers were losing $13 per head. Pork packers saw average profits of $22 per head, a decrease of $4 per head from the previous week...

 

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https://www.drovers.com/article/profit-tracker-mid-winter-margins