Feeder cattle (7-8 wt.) hit a new record high last week pushing the estimated breakeven for those cattle to $210/cwt with an estimated finish time in early November.
While we cannot rule out the opportunity for a positive margin (unhedged) on those cattle is not out of the realm of possibility, red ink increasingly, with those high breakevens, becomes more likely. At the same time, current feeding margins remains strong with last week’s estimated margin bumping nearly $600 per head with 5-Area Direct steers averaging a record $221.88/cwt.
Packers saw more red ink with their margin estimated at -$220/head. Fed cattle plants operated at an estimated average 78% utilization while cow plants were at 60% utilization with the new American FoodsGroup plant adding 1,200 head to both fed and cow slaughter capacity.
View the full Sterling Beef Profit Tracker for the week ending May 3.
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.)
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