Cattle Feeding Margins Near $170 Per Head

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Cattle feeding margins improved another $22 per head last week, pushing profit levels to near $170, according to estimates developed by Sterling Marketing, Inc., Vale, Oregon.

“Estimates for feedlot feed costs, breakeven prices, and margins are generated based on the cost of a 775- pound feeder steer, and corn prices (Western Kansas) during the week the cattle were placed on feed,” says John Nalivka, Sterling Marketing president.

“The days on feed for those animals and closeout week are then calculated using average data that might be expected for feeding performance, i.e. feed conversion and ADG. Breakevens and margins will vary according to differences in the cost of cattle, cost of feed, and feeding performance,” Nalivka says. “While I recognize the significant differences in performance during periods of extreme stress due to weather - such as those experienced over the past 60 days - Sterling Marketing does not attempt to adjust the model accordingly. Consequently, the estimated breakeven price may seem low, while the estimated margins may seem high.”

This week, packer margins declined $4 per head and remain in negative territory. The Sterling Profit Quotient gained 65 points for the week.

The Sterling Beef Profit Tracker is calculated using actual weekly prices for Choice fed steers, feeder steers, feed costs, boxed beef-cutout prices, hide and offal values, and other factors that influence profit margins.

The Sterling Beef Profit Tracker for the week ending 3/20/2010.

• Average feedyard margins: $169.36 per head.
• Average packer margins: -$19.68 per head.
• Sterling Profit Quotient: 505.9.

For additional information and a chart about this week’s Sterling Beef Profit Tracker, click here.

The Sterling Beef Profit Tracker is produced by Sterling Marketing Inc. and John Nalivka, president, Vale, Ore., and is published weekly by Drovers/CattleNetwork.

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