Another week, another 8% increase in feedyard profit margins. Average closeouts reveal profits of $439 per head for cattle shipped to packers last week, up $36 from the previous week and nearly $200 more than a month ago. It was the 17th consecutive week of feedyard profitability, according to the Sterling Beef Profit Tracker.
Feedyards have clearly held the marketing leverage for most of 2017, but packers are also enjoying healthy profits. Last week packer margins averaged $175 for every animal slaughtered, a $44 increase from the previous week, and $180 better than the $5 loss they recorded a month ago. The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.
Last week’s 5-area cash fed cattle price increased more than $3 per cwt to $128.11, a rally of about $10 over the past month. The cost of finishing a steer was calculated at $1,343 per head, which is $556 less than the $1,899 a year ago.
A month ago cattle feeders were earning $245 per head, while a year ago profits were calculated at $34 per head. Feeder cattle represent 72% of the cost of finishing a steer, compared to 78% last year.
Farrow-to-finish pork producers earned $26 per hog last week, steady with the previous week. A month ago farrow-to-finish pork producers showed a profit of about $39 per head.
Pork packers saw their margins improve $2 per head to $19. Negotiated prices for lean hogs were $69.24 per cwt. last week, about $0.91 per cwt. lower. Cash prices for fed cattle are $11 per cwt. lower than last year and prices for lean hogs are about $4 higher than last year.
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.