There has been a notable shift in margins as Choice steer bids continued to weaken. While it may seem to be a reasonable explanation, Tyson’s announced closure of their Lexington, Neb., plant is the reason for the drop in Choice steer prices.
That announcement came late on Friday afternoon, prices were weaker early last week. The market simply does not work in that manner and that there is still excess packer capacity with that plant closure.
At any rate, Sterling’s estimate of last week’s average packer margin was -$8/head or breakeven while the average feedlot margin fell to $148.73 per head compared to $264.41 per head the previous week.
The 5-Area Steer price averaged $216.87/cwt. last week and down nearly $8/cwt. from the prior week.
View the full Sterling Beef Profit Tracker for the week ending Nov. 22.
The Beef and Pork Profit Trackers are calculated by Sterling Marketing, Vale, Ore.
(Note: The Sterling Beef Profit Tracker calculates an average beef cutout value for the week in its estimates for feedyard and packer margins. Other prices in the weekly Profit Tracker also are calculated weekly averages. Feedyard margins are calculated on a cash basis only with no adjustment for risk management practices. The Beef and Pork Profit Trackers are intended only as a benchmark for the average cash costs of feeding cattle and hogs. Sterling Marketing is a private, independent beef and pork consulting firm not associated with any packing company or livestock feeding enterprise.)
