It should be a good year to be in the cattle business if the Sterling Beef Profit Tracker is accurate in its predictions.
The Sterling Beef Profit Tracker comes from Sterling Marketing of Vale, Ore., and is published by “AgWeb.”
For 2018, the Beef Profit Tracker estimated feedlot margins at a positive $51.00 per head, down $185.46, or 78.4%, from $236.46 last year but up from a minus $4.25 in 2016 and a minus $110.50 in 2015.
Beef packer margins for the year were estimated at $118.00 a head, down from $120.64 last year but up from 2016’s positive $113.85 and $31.60 for 2015.
And 2018 cow/calf margins were estimated at a positive $115.00 per cow, compared with $157.99 last year and a positive $172.68 in 2016 and 2015’s positive $438.39.
WEEKLY FEEDLOT MARGIN UP
The estimated margin for cattle feeders last week went up $16.19 a head, or 17.6%, to a positive $108.01 per head from $91.82 a week earlier. While this margin doesn’t hold a candle to the $479.25 estimated positive margin of the same week a year earlier, it’s still above the $79.51 of a month earlier.
To arrive at its estimate of feedlot margins last week, the Beef Profit Tracker used the USDA’s five-area price of $123.24 per cwt and an average Oklahoma City auction market price of $154.27 per cwt for 750- to 800-pound feeder steers.
Feed cost was estimated at $270.53 a head for the cattle sold to packers last week for a total cost of $1,606.87 per head. That meant the fed cattle had to have a price of $115.44 to break even. Instead, they went for $123.24.
The estimated breakeven price needed for those same 750- 800-pound feeder steers placed last week was $114.94. For this, the Beef Profit Tracker estimated a feeder steer cost of $149.63 per cwt and a feed cost of $298.42 per head for a total cost of $1,599.90 a head.
The Livestock Marketing Information Center forecasted monthly breakeven prices to decline from April’s $125.35 per cwt through August’s $114.05.
June’s LMIC estimated breakeven was the only exception with a forecast of $122.91 against May’s $122.57.
PACKER MARGINS UP
It’s no wonder packer buyers are trying to book slaughter inventory out into May and June with estimated margins last week at a positive $145.00 a head.
That was up $20.75, or 16.7%, from $124.25 the previous week but down $26.41, or 15.4%, from $171.41 a month earlier. It also was up $94.90, or 189.4%, from $50.10 a year earlier.
CATTLE, BEEF RECAP
Out of 2,982 fed cattle presented, 413 sold Wednesday on the Livestock Exchange Video Auction, all for 1- to 9-day delivery, at $122.40 per cwt. There were no sales the previous Wednesday.
Early week cash cattle trade last week was reported at $120 to $121 per cwt on a live basis, down $1 from the previous week and lightly at $195 dressed, steady with the upper end of the previous week’s range. However, Friday trade was at $124 to $126 live, up $3 to $4, and at $198 dressed, up $3 to $7.
The USDA choice cutout Wednesday was up $0.87 per cwt at $227.30, while select was up $0.79 at $207.88. The choice/select spread widened to $19.42 from $19.34 with 80 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Tuesday, was $139.13 per cwt, down $0.14. This compares with Wednesday’s May close of $138.62, up $0.72.