Cattle feeding margins rose $16.54 a head last week to $38.14 from $21.60 the previous week, a gain of 76.6%, according to the Sterling Beef Profit Tracker, published by AgWeb.
Last week’s margins for unhedged feeders was up even from those of a month earlier when it was $35.80 a head, the profit tracker said. A year earlier, feedlots lost a calculated average of $27.90 a head.
Sterling’s profit tracker isn’t meant to be exact. It is meant as a representation of where prices are going in relation to costs on average and seems to be gaining in popularity.
STEER PRICES UP
The profit tracker listed the USDA’s five-area direct fed steer price of $116.50 per cwt as its starting point for figuring last week’s profit on slaughter-ready steers sold to packer buyers. This was up $2.54, or 2.23%, from $113.96 per cwt the week before and up $2.47, or 2.17%, from $114.03 a month earlier.
A year earlier, the USDA fed steer price was $118.64, yet the calculated loss was $27.90 a head as feeder steer and feed costs were higher then.
The feeder steer price used for last week’s calculated feeder profit was the average Oklahoma City price for 750- to 800-pound steers at $145.30 per cwt, up $3.39, or 2.39%, from $141.91 a week earlier and $5.02, or 3.58%, higher than the month-earlier price of $140.28.
The feeder steer price used against the profit/loss figure a year earlier was $157.00 per cwt, $11.70, or 7.45%, higher.
The profit tracker used a feed cost of $274.59 a head for the fed steers sold last week. This was down from $284.82 the previous week and $284.67 a month earlier. It even was below last year’s $279.39.
That brought the total calculated cost of a fed steer to $1,559.26, compared with $1,541.26 the previous week, $1,528.01 a month earlier and last year’s $1,654.41.
The calculated breakeven cost of fed steers sold to packers last week was $113.70 per cwt, up from $112.37 a week earlier and the $111.40 a month earlier. However, it was below the year-earlier breakeven of $120.69 per cwt.
For feeder steers placed on feed last week, feeders will need to get $114.54 per cwt to break even. This was up from $112.70 a week earlier but down from $119.58 a month earlier. For steers placed on feed a year ago last week, the breakeven price was $118.08 per cwt.
PACKER MARGINS DIP
Profit tracker’s calculated margin for cattle purchased last week was $198.66 a head, down from $207.89 a week earlier and $218.09 for cattle purchased a month earlier. However, the estimated packer margin was well ahead of the $97.91 in the same week a year earlier.
That margin was based on a continued strong USDA beef cutout price of $211.35 per cwt, versus $204.81 a year earlier.
CATTLE, BEEF RECAP
Cash cattle traded last week early at $114 per cwt on a live basis, steady with the previous week, and at $180 on a dressed basis, up $2 to $5. However, the bulk of last week’s action took place Wednesday and Friday at $116 to $117 per cwt live, up $2 to $3, and at $180 dressed.
The USDA choice cutout Tuesday was down $0.45 per cwt at $214.00, while select was up $0.45 at $200.24. The choice/select spread narrowed to $13.76 from $14.66 with 95 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Monday, was $148.17 per cwt, up $0.65. This compares with Tuesday’s Jan settlement of $148.42, down $0.72.