A $3-plus rally in cash fed cattle prices pulled packer margins under
$20 per head last week. Despite the increase in cash prices, cattle
feeding margins slipped $6 per head, but remain at $206. Declines in
cattle feeding profits were the result of higher costs, mostly due to a
$57 per head increase in the cost of feeder cattle calculated against
last week’s marketings, according to the Sterling Beef Profit
Tracker.The 5-area average Choice steer price last week was $129.88, up
$3.68 per cwt. The price of feeder cattle calculated against the fed
cattle sales were $153.30 per cwt., or $6.21 per cwt. higher. The cost
of finishing a steer last week was calculated at $1,601, which is $169
higher than the $1,432 a year ago. The beef cutout remained relatively
steady at $207.79 per cwt. The Beef and Pork Profit Trackers are
calculated by Sterling Marketing Inc., Vale, Ore.A month ago cattle
feeders were earning $196 per head, while a year ago profits were
calculated at $233 per head. Feeder cattle represent 74% of the cost of
finishing a steer, compared to 73% last year.Farrow-to-finish pork
producers saw their margins decline $9 per head to $25. Lean carcass
prices traded at $69.48, a decline of $4.32 per cwt. from the previous
week. A year ago pork producers earned an average of $39 per head. Pork
packer margins improved from breakeven to an $8 profit per head.Cash
prices for fed cattle are $10 per cwt. higher than the same week a year
ago. Lean hog prices are about $2 per cwt. lower than last year.Sterling
Marketing president John Nalivka projects cash profit margins for
cow-calf producers in 2018 will average $122 per cow. That would be $36
per head less than the estimated average profit of $158 for 2017.
Estimated average cow-calf margins were $438 per cow in 2015.For
feedyards, Nalivka projects an average profit of $86 per head in 2018,
which would be $150 less than the average of $236 per head in 2017.
Nalivka expects packer margins to average about $90 per head in 2018,
down from $123 in 2017.For farrow-to-finish pork producers, Nalivka
projects 2018 profit margins will average $18.25 per head, compared to
$20.87 in 2017. Pork packers are projected to earn $19 per head in 2018,
down slightly from $25 profit per head in 2017.
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