With nearly a $4/cwt. drop in the cost of cattle for cattle purchased two weeks ago and slaughtered last week, packer margins showed modest improvement last week to average -$237.64/head compared to -$291.75/head the prior week as calculated by Sterling.
Also, last week did not have the Memorial Day holiday but it did have the strike at Cargill’s Fort Morgan plant, leading to higher utilization of plant capacity, which was estimated at 78.8% for the week compared to 66% the prior week.
Feedlot margins also fared considerably better with Sterling’s estimated for the weekly average at $456.21/head compared to $355.52 the prior week. Sterling estimates the breakeven for cattle placed on feed last week was down sharply from the prior averaging $239.75 against $247.53 the prior week.
View the full Sterling Beef Profit Tracker for the week ending June 6.
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.)
