The reality of a shift in margins became increasingly apparent last week. Sterling’s estimated average beef packer margin for the week was $184.33/head with an estimated plant capacity utilization at 84.4% compared to $19.51/head and utilization of 79.2% a year ago. This was the largest packer per-head profit since April 2022.
At the same time, unhedged feeding margins continued to erode with the Sterling’s estimated for last week at -$340/head with the break-even at $244/cwt. against the average 5-Area Direct Negotiated price at $219.80/cwt.
This was the largest feeding loss since January 2016 and for the same reason — record-high feeder cattle prices when these cattle were placed on feed. Sterling’s feedlot model has cattle placed for current closeouts during March 2026 while for January 2016 margins, the cattle were placed in July 2015.
View the full Sterling Beef Profit Tracker for the week ending Oct. 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.)
