Cattle feeding margins narrowed sharply for the week of July 18. Sterling’ s estimate for the cattle marketed on the show list last week was $104.61/head.
The 5-Area Direct price averaged $238.50/cwt. against the prior week’s average of $248.01/cwt. Sterling’s estimate for last week’s breakeven was $231/cwt. while the breakeven for cattle placed on feed last week was sharply higher at $247.31/cwt., which places a great deal of confidence in market performance when those cattle are marketed at the end of the fourth quarter.
Meanwhile, packers saw some improvement in margins last week with Sterling’s estimate at -$293.83/head against -$311.11/head the previous week — if that is to be called an improvement! Consolidation of capacity continues to be the corrective action to the packer’s situation as cattle numbers will remain relatively tight going forward.
View the full Sterling Beef Profit Tracker for the week ending July 18.
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.)
