Cattle feeding margins held steady last week with moderate losses as cash fed cattle prices were up just 42 cents per hundredweight. Packer margins declined $4 per head for the week, remaining near the $50 profit per head mark, according to the Sterling Beef Profit Tracker. The Sterling Profit Quotient gained 105 points for the week, according to estimates developed by Sterling Marketing Inc., Vale, Ore.

Fed cattle traded at $112 last week, with dressed prices at $178. The previous two weeks had added $6 to $8 per hundredweight, and initiated ideas the summer lows may already be in place. The average seasonal decline from spring highs to summer lows is 13 percent, and the 2011 market has already seen a 15 percent break from the $124 highs recorded in April.

 

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 July 2:

  • Average feedyard margins: -$13.60 per head.
  • Average packer margins: $48.36 per head.
  • Sterling Profit Quotient: - 28.6.

“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.