There was not much change, at least directionally, in beef industry margins last week as unhedged feedlot margins continued to erode with last week’s Sterling estimate at -$335.15/head compared to -$156.08/head a month earlier and $498.66/head a year ago.
As I have indicated over the last several months, the problem is high break-evens resulting from a strong feeder cattle market as feeders compete to fill unused pen space. The average 5-Area Direct Steer price was $220.67/cwt., down $1/cwt. from the prior week.
Packers continued to post strong margins even in the face of lower plant capacity utilization with reduced cattle slaughter last week with the Sterling estimated packer margin last week averaging $151.48/head.
View the full Sterling Beef Profit Tracker for the week ending Sept. 26.
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.)
