Feedyard closeouts fell $48 per head last week, but margins remain more than $377. Cash fed cattle prices declined more than $2 per cwt., accounting for most of the erosion in margins, according to the Sterling Beef Profit Tracker. However, feedyards were in the black for the 20th consecutive week.

Packers have become timid bidders the past two weeks, and reported sales occurred late in the week. Yet, even with lower cash prices, packers saw their margins drop 27% last week to a profit of $71 on each animal processed. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.

The cost of finishing a steer last week was calculated at $1,357 per head, which is $488 less than the $1,845 a year ago.  

A month ago cattle feeders were earning $403 per head, while a year ago profits were calculated at $18 per head. Feeder cattle represent 73% of the cost of finishing a steer, compared to 78% last year.

Farrow-to-finish pork producers earned $8 per hog last week, about $6 less than the prior week. A month ago farrow-to-finish pork producers showed a profit of about $26 per head.

Pork packers saw their margins increase $3 per head to $19. Negotiated prices for lean hogs were $62 per cwt. last week, about $3 per cwt. lower. Cash prices for fed cattle are $9 per cwt. lower than last year and prices for lean hogs are about $3 per cwt. lower.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $78 per cow. That would be $99 per head less than the estimated average profit of $177 for 2016. Estimated average cow-calf margins were $438 per cow in 2015.

For feedyards, Nalivka projects an average profit of $133 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $51 per head in 2017, down from $114 in 2016.