With break-evens of roughly $102 per cwt and a 5-area average price of $144.48, cattle feeders saw average profit margins soar to nearly $590 per head last week, or $100 higher. For many, that’s uncharted territory, and it marked the 24th consecutive week of feedyard profitability, according to the Sterling Beef Profit Tracker.
Despite paying $7 to $8 per cwt more for fed cattle last week, packers also saw improving profit margins. Packer margins exceeded $63 per head, $20 more 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 $1,419 per head, which is $316 less than the $1,735 a year ago.
A month ago cattle feeders were earning $377 per head, while a year ago profits were calculated at $30 per head. Feeder cattle represent 74% of the cost of finishing a steer, compared to 77% last year.
Farrow-to-finish pork producers earned $13 profit per hog last week, a $16 improvement from last week’s $3 loss. A month ago farrow-to-finish pork producers showed a profit of about $8 per head.
Pork packers saw their margins decrease $11 per head to $21 per head. Negotiated prices for lean hogs were $64.62 per cwt last week, about $7.45 per cwt. higher. Cash prices for fed cattle are $17 per cwt. higher than last year and prices for lean hogs are about $9.31 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.