The weight of increasing grain prices continues to pressure all segments of the beef industry. Indicators measuring America’s beef economy produced an overall down arrow for March. Four key indicators produced arrows pointing lower, while two yielded sideways arrows and two pointed higher. Higher production costs continued to produce excessive losses for cattle feeders, topping $86 per head for the month. Lower fed-cattle prices and higher corn prices pushed the steer-corn ratio below 18. Key cattle prices were slightly lower for the month. Cattle on feed numbers remain relatively large, suggesting an increase in beef production in 2008. Competitive meats produced a sideways arrow as supplies of pork and poultry remain large and prices were nearly steady. Packer margins, which were nearly $60 per head during March, remain an industry bright spot.
The month of May is expected to produce an improvement to the industry’s overall economy as projected by the Sterling Profit Quotient. Feedyard profit margins will remain negative, but should improve considerably in May.