Against a breakeven price of $247/cwt. for cattle marketed last week, a $4/cwt. drop in 5-Area Direct Steer prices to $223.65/cwt. last week left unhedged feeding margins $100/head deeper into the red ink and averaging -$328.45/head.
While the lower cost of cattle was positive for packer margins, the Composite Beef Cutout averaged $370.82/cwt. and $1/cwt. lower than the prior week. Thus, packer margins were pushed into red ink and averaged -$3.65/head compared to $54.36/head the prior week. Plant capacity utilization averaged 83% for the week, down from 83.4% the prior week.
View the full Sterling Beef Profit Tracker for the week ending Oct. 31.
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.)
