Feeder Margins Plunge to Multi-Year Lows

A Drovers article

The reality of a shift in margins became increasingly apparent last week. Sterling’s estimated average beef packer margin for the week was $184.33/head with an estimated plant capacity utilization at 84.4% compared to $19.51/head and utilization of 79.2% a year ago. This was the largest packer per-head profit since April 2022.

At the same time, unhedged feeding margins continued to erode with the Sterling’s estimated for last week at -$340/head with the break-even at $244/cwt. against the average 5-Area Direct Negotiated price at $219.80/cwt.

This was the largest feeding loss since January 2016 and for the same reason — record-high feeder cattle prices when these cattle were placed on feed. Sterling’s feedlot model has cattle placed for current closeouts during March 2026 while for January 2016 margins, the cattle were placed in July 2015.

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