Unhedged cattle feeders logged an average calculated profit last week of $5.64 per head, despite a decline in fed cattle prices, as the initial cost of the cattle sold for slaughter declined, the Sterling Beef Profit Tracker showed.
The Beef Profit Tracker was reported on the Farm Journal’s AgWeb page.
FEEDER MARGINS IN THE BLACK
It showed that average unhedged feedlot margins for cattle sold to packers last week were up from a loss of $42.11 a head a week earlier. It also was up from a minus $19.98 a month earlier and way better than a loss of $103.04 a head a year ago.
To arrive at that calculated profit margin, John Nalivka, owner of Sterling Marketing and creator of the Sterling Beef Profit Tracker, used the USDA’s weekly five-area direct price of $101.09 per cwt. This was down $1.96 per cwt, or 1.90%, from $103.05 per cwt a week earlier as well as being $4.37, or 4.14%, below the $105.46 feeders received a month earlier. However, last week’s USDA average was $0.39, or 0.39%, more than the $100.70 they got a year earlier.
Nalivka also used a feeder cattle price of $126.61 per cwt for the slaughter-ready cattle sold to beef packers last week. He got this from the USDA’s reported price from the Oklahoma City, OK, auction market.
That price was down $8.98 per cwt, or 6.62%, from the $135.59 cost of the fat cattle sold the previous week and $6.94, or 5.20%, less than the $133.55 for those marketed to packers a month earlier and $21.63, or 14.6%, less than the $148.24 cost for fat cattle sold to packers a year earlier.
The cost of feed for cattle exiting the feedlots last week was $255.66 a head, down $2.64, or 1.02%, from $258.30 for cattle sold a week earlier and $24.98, or 8.90%, below the $280.64 for cattle sold a month earlier. Feed costs also were $19.70, or 7.15%, less than the $275.36 per head for cattle sold a year earlier.
That brought a total cost per head of $1,369.19 for the cattle sold to packers last week. This was down from $1,443.59 for those sold a week earlier and below the $1,454.23 for cattle sold a month earlier and even below the $1,572.56 for those sold a year earlier.
BREAKEVENS RISE FOR THE NEXT ROUND
While the breakeven price for cattle sold last week was $100.68 per cwt, the estimated breakeven cost for 750- to 800-pound feeder cattle entering the feedlot last week was $108.01 per cwt. This was up from the $107.53 estimated cost for those that went on feed a week earlier but less than the $110.06 estimated cost for calves that came into the feedlots a month earlier. It also was more than the $107.77 estimated breakeven price for feeder cattle going on feed a year earlier.
CATTLE, BEEF RECAP
Fed cattle trading this week was reported in the Plains at $103 to $103.50 per cwt on a live basis, up $1.50 to $2 from last week. Dressed-basis trading last week was seen at $160 to $161 per cwt, down $2 to $3.
The USDA choice cutout Wednesday was down $0.71 per cwt at $215.38, while select was off $1.77 at $204.51. The choice/select spread widened to $10.87 from $9.81 with 123 loads of fabricated product and 43 loads of trimmings and grinds sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Tuesday was at $140.60 per cwt, up $0.08. This compares with Wednesday’s Sep contract settlement of $140.50 per cwt, down $1.17.