Too much packing capacity and feedlot break-evens are falling into dangerous territory. Packer margins fell further into red ink last week as the Choice steer prices edged $2/cwt. higher to average $235.23/cwt. for the week while the Composite Cutout was weaker, averaging $364.68/cwt. against $365.81/cwt. the prior week.
Sterling calculated packers losing $171.75/head while feedlot margins averaged -$48.14/head last week. Steer and heifer slaughter was 526,875 compared to 534,560 the previous week, leaving plant utilization at 80.8%.
View the full Sterling Beef Profit Tracker for the week ending Aug. 8.
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.)
