Cattle feeding profits higher, packer margins decline

Cattle feeding profits increased more than $85 per head last week, as cash fed cattle prices spiked $8 to $10 per hundredweight higher. Packer margins declined nearly $28 per head, but remained solidly profitable for the week. Cash fed cattle prices set new record highs for the week, with prices trading at $121 to $123. The Sterling Profit Quotient increased 251 points for the week, according to estimates developed by Sterling Marketing Inc., Vale, Ore.

“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 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 April 2:

• Average feedyard margins: $225.84 per head.
• Average packer margins: $48.76 per head.
• Sterling Profit Quotient: 693.6.

The Sterling Beef Profit Tracker is produced by Sterling Marketing Inc. and John Nalivka, president, Vale, Ore., and is published weekly by Drovers/CattleNetwork.