Estimated margins for fed cattle sold by unhedged cattle feeders last week were down slightly from the previous week but still were positive, according to Sterling Marketing Inc’s Beef Profit Tracker, published by the Farm Journal’s AgWeb.
Estimated packer margins remained very high.
FEEDING MARGINS POSITIVE
The calculated feeding margin for cattle sold for slaughter last week came to a positive $82.66 per head, down $2.11, or 2.49%, from $84.77 a week earlier but up from a minus $17.11 a month earlier. It was much less than the positive $161.70 of the same week a year earlier, a difference of $79.04, or 48.9%, however.
To arrive at that estimated margin, John Nalivka, owner of Sterling Marketing, used the USDA’s five-area direct price for the week of $114.09 per cwt. This compared with the $113.76 of a week earlier, $108.81 of a month earlier and the $119.66 of a year earlier.
Nalivka calculated a feeder steer price from the Oklahoma City auction market for 750- to 800-pound steers of $135.74 per cwt, the same as a week earlier but below the $143.35 of a month earlier and above the $134.61 of a year ago.
He estimated an average, per-head feed cost of $282.19, compared with $275.67 a week earlier, $252.56 a month earlier and $279.24 a year earlier.
BREAKEVENS RISING
For 750- to 800-pound steers placed on feed last week, Nalivka estimated a breakeven price of $114.76 per cwt, up from $114.49 for those placed the week before, $113.85 for those placed a month earlier and $110.93 a year earlier.
Nalivka used a steer price of $130.79 per cwt for his breakeven calculation, compared with $130.79 a week earlier, $132.72 a month earlier and $139.98 a year earlier.
An estimated feed cost of $412.03 a head was published for cattle placed on feed last week, compared with $408.31 a week earlier, $384.57 a month earlier and $281.26 a year earlier.
PACKER MARGIN VERY BLACK
The calculated beef packer margin for cattle purchased last week came to $389.30 a head, up from $366.82 a week earlier, up from $305.74 a month earlier and up from $69.44 a year earlier.
The cost of those steers was balanced by a beef cutout of $235.14 per cwt, versus $232.78 a week earlier, $217.67 a month earlier and $207.13 a year earlier.
The drop credit he used to calculate the packer margin was $147.16 per head for cattle purchased last week, compared with $146.76 for those purchased a week earlier, $142.61 a month earlier and $136.35 a year earlier.
CATTLE, BEEF RECAP
Limited fed cattle trading was reported in the Plains this week at $114 per cwt on a live basis, up $1 to down $2 from last week. Dressed-basis trading was seen at $181, up $1 to down $1 from last week.
The USDA choice cutout Wednesday was up $1.11 per cwt at $241.40, while select was down $0.64 at $229.89. The choice/select spread widened to $11.51 from $9.76 with 60 loads of fabricated product and 21 loads of trimmings and grinds sold into the spot market.
The USDA reported Wednesday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.00 to $1.25 a bushel over the Mar CBOT futures contract, which settled at $5.59 1/4 a bushel, up $0.05 1/2.
Two steer contracts were tendered for delivery against the Feb futures contract Wednesday at zero, and two were demanded at zero.
The CME Feeder Cattle Index for the seven days ended Monday was $140.39 per cwt, down $0.73. This compares with Tuesday’s Mar contract settlement of $138.57 per cwt, down $0.75.