Beef packers continued to face negative margins last week with the situation unchanged due to current market fundamentals. Margin erosion was further compounded by unused capacity. Sterling’s packer margins averaged -$188.10/head for the week compared to -$170.50/head the prior week with Sterling’s estimate of capacity utilization at 77.5% for fed cattle plants and 60% for cow plants.
Feedlots were also dealt a blow last week as Sterling estimated feeding margin fell to -$2.50.head from $118.64/head the prior week as the week’s average for 5-Area Direct Steers fell $2/cwt to average $246.19/cwt.
View the full Sterling Beef Profit Tracker for the week ending April 25.
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.)
