Packers were a little reluctant early last week, but pay up they did, driving cash fed cattle prices $3 higher and feedyard margins $32 per head higher. Cattle feeders turned an average profit of $474 per head last week as the Choice 5-area steer price reached $131.40 per cwt. It was the 22nd consecutive week of positive feedyard margins, according to the Sterling Beef Profit Tracker.

Packers had plenty of motive to bid up, as their own margins topped $69 per head, about $1 better than the previous week. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.

The cost of finishing a steer last week was calculated at $1,354 per head, which is $388 less than the $1,742 a year ago.  

A month ago cattle feeders were earning $505 per head, while a year ago profits were calculated at $14 per head. Feeder cattle represent 73% of the cost of finishing a steer, compared to 77% last year.

Farrow-to-finish pork producers lost $5 per hog last week, an $8 decline from last week’s $3 profit. A month ago farrow-to-finish pork producers showed a profit of about $23 per head.

Pork packers saw their margins increase $5 per head to $31. Negotiated prices for lean hogs were $56.24 per cwt. last week, about $2.50 per cwt. lower. Cash prices for fed cattle are $5 per cwt. higher than last year and prices for lean hogs are about $11 per cwt. lower.

Sterling Marketing president John Nalivka projects cash profit margins for cow-calf producers in 2017 will average $92 per cow. That would be $85 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 $210 per head in 2017, which compares favorably with average losses of $4.25 per head in 2016. Nalivka expects packer margins to average about $24 per head in 2017, down from $114 in 2016.