Market dynamics worked for packers last week. The Comprehensive Cutout averaged $379.03/cwt. for the week compared to $371.14/cwt. the prior week. The price of slaughter cattle fell $3.50/cwt. with the 5-Area Direct Steer price averaging $225.01/cwt. for the week and fed plant utilization averaged 80%.
Taken, these three market factors pushed Sterling’s calculated packer margin into positive territory at $37.93/head — a significant jump from the prior week’s -$142.33 average. This was the first positive packer margin since the first week of April. However, the drop in Choice steer prices left feedlot margins further into red ink for the week with Sterling’s calculation at -$156/head.
View the full Sterling Beef Profit Tracker for the week ending Aug. 22.
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.)
