Cattle feeding margins declined $32 per head last week as cash fed cattle prices fell $1 per hundredweight to $121. Cattle feeders lost an average of $64 on every animal sold last week, according to the Sterling Beef Profit Tracker. Packer margins improved more than $8 per head, leaving packers with losses of $25 for each animal processed. The Sterling Beef Profit Quotient lost 92 points for the week, according to estimates developed by Sterling Marketing Inc., Vale, Ore.
Choice boxed beef cutout prices closed the week at $190.10 per hundredweight, down $4.63 from the previous Friday. Select prices were $179.13, up $6.37 from the previous week.
Feed accounts for more than 29 percent of total feeding costs, while closeouts at the same time last year show feed at just 20 percent of total feeding costs.
For comparison, last week’s closeouts saw average cash prices at $121.03 per hundredweight, while last year’s cash prices were at $106.17 per hundredweight. One year ago feedyards were reporting average profits of $152.61 per head.
The Sterling Beef Profit Tracker is calculated using actual weekly prices for Choice fed steers, feeder steers, feed costs, boxed beef-cutout prices, hide and offal values, and other factors that influence profit margins.
The Sterling Beef Profit Tracker for the week ending January 7:
- Average feedyard margins: -$64.08 per head.
- Average packer margins: -$25.38 per head.
- Sterling Profit Quotient: -199.8.
“Estimates for feedlot feed costs, breakeven prices, and margins are generated based on the cost of a 775- pound feeder steer, and corn prices (Western Kansas) during the week the cattle were placed on feed,” says John Nalivka, Sterling Marketing president.
“The days on feed for those animals and closeout week are then calculated using average data that might be expected for feeding performance, i.e. feed conversion and ADG. Breakevens and margins will vary according to differences in the cost of cattle, cost of feed, and feeding performance,” Nalivka says.
The Sterling Beef Profit Tracker is produced by Sterling Marketing Inc. and John Nalivka, president, Vale, Ore., and is published weekly by Drovers/CattleNetwork.