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February 02, 2011

Cattle feeding margins decline, packer margins improve

Cattle feeding margins declined about US$12 per head last week, while packer margins improved US$30 per head. Feeding margins slipped below the US$100 per head threshold, while packer margins jumped above US$50 per head. The Sterling Profit Quotient lost nearly 30 points for the week, according to estimates developed by Sterling Marketing Inc, Vale, Ore.

“Estimates for feedlot feed costs, break even 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. Break evens and margins will vary according to differences in the cost of cattle, cost of feed, and feeding performance,” Nalivka says. Read more...

This blog is written by Martin Little The Global Miller, published and supported by the GFMT Magazine from Perendale Publishers.

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