Average cattle feeding margins were near steady last week despite weaker cash prices. Pork producer margins slipped further into the red as lean carcass prices dropped more than 3% for the week.
Cattle feeders are finding modest profits on market-ready cattle early in the New Year, but replacement feeder cattle prices are driving projected breakevens to eight-year highs.
The pendulum continues swinging toward cattle feeders as cash prices jumped $3 last week and left packers with their largest negative margins in nearly six years.
Cattle and hog harvest rates were lower last week with higher cash prices paid to farmers and feeders. Margins for both beef and pork packers are trending lower.
As cash cattle prices have been on an upward trajectory in 2023, packer margins have correspondingly moved lower. Sterling Marketing’s weekly estimates are printing packer margins red for the first time in six years.
Cash cattle and wholesale beef prices moved higher last week, increasing profit margins for both cattle feeders and beef packers. Pork producers saw modest per head losses.
Cattle feeding margins remain favorable despite higher costs. Tighter supplies of market-ready cattle become a growing challenge for packers as their margins are squeezed.
