Cattle feeding margins improve, profits may be near

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Cattle feeders are likely running low on red ink to print closeouts, but average industry losses may soon be over, if recent trends are any indication.

Last week cattle feeders lost an average of $41 on every animal marketed, which was nearly $43 per head better than the previous week, and $83 per head better than a month ago, according to the Sterling Beef Profit Tracker. Margins have shown improvement with decreasing feeding costs and increases in sales prices.

Packer margins improved last week, gaining $7 per head to average $14 profits on every animal processed, according to estimates by Sterling Marketing, Inc., Vale, Ore.

Pork producer margins declined $4.37 per head, with margins now a positive $25.48 per hog marketed, according to the Sterling Pork Profit Tracker. Negotiated cash hog prices declined $2.08 per hundredweight last week to $99.30. Pork packer margins improved $1.30 per head for the week, finishing near breakeven.

A year ago cattle feeders sold cash cattle at $120 per hundredweight, resulting in losses of $198 per head. Last year cash hogs fetched $88.80 per hundredweight, resulting in profits of $15 per head.

The Sterling Beef and Pork Profit Trackers are calculated using actual weekly prices for both cattle and hogs, feed costs, beef and pork cutout prices, drop credits and other factors that influence profit margins.

The Sterling Beef Profit Tracker for the week ending August 17:

  • Average feedyard margins: -$41.58 per head.
  • Average packer margins: $14.86 per head.

The Sterling Pork Profit Tracker for the week ending August 16:                                          

  • Average farrow-to-finish margins: $25.48 per head.
  • Average pork packer margins: $1.34 per head.

The Sterling Beef and Pork Profit Trackers are produced by Sterling Marketing Inc. and John Nalivka, president, Vale, Ore., and are published weekly by Drovers/CattleNetwork, and PorkNetwork.



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