Profit Tracker: Feedyard Margins Decline $80

Cattle feeding margins declined by $80 per head last week as cash prices slumped $1 to $2 per cwt.
Cattle feeding margins declined by $80 per head last week as cash prices slumped $1 to $2 per cwt.
(Wyatt Bechtel)

Cattle feeding margins declined by $80 per head last week as cash prices slumped $1 to $2 per cwt. Industry average profit margins on cattle sold last week were $68 per head, according to the Sterling Beef Profit Tracker.

For the week ending April 5, cash cattle sold for an average of $124.59 per cwt., while the beef cutout closed the week at $225.48 down $1.55 from March 29. Packers saw profits of $154 per head last week, $14 higher than the previous week. The Beef and Pork Profit Trackers are calculated by Sterling Marketing Inc., Vale, Ore.

A year ago cattle feeders were losing an average of $13 per head. Feeder cattle represent 74% of the cost of finishing a steer compared with 74% a year ago.

Farrow-to-finish pork producers saw their margins improve $4 per head with profits of $40 per head. Lean carcass prices traded at $78.38 per cwt., $1.60 per cwt. higher than the previous week, and $31.18 higher than a month ago. A year ago pork producer margins were negative $21 per head. Pork packer margins averaged a loss of $2 per head last week.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2019 will average $144 per cow. That would be modestly lower compared to the $161 estimated average profit for 2018. Estimated average cow-calf margins were $164 in 2017, $176 in 2016, and $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $77 per head in 2019, which would be $53 better than the average of $24 per head in 2018. Nalivka expects packer margins to average about $156 per head in 2019, about $14 less than in 2018.

For farrow-to-finish pork producers, Nalivka projects an average loss of $14.60 per head in 2019, as compared with an average profit of $1.35 per head in 2018. Pork packers are projected to earn $21 per head in 2019, about $3 less than the $20 per head profits of 2018.

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Profit Tracker: Feedyard Margins Solid


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