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Cattle feeders experience largest average profits in seven years as packer margins dip into the red.

Profit margins for cattle feeders and packers continue pacing in opposite directions as shrinking supplies of market-ready cattle drive negotiated cash prices higher.

Cattle prices moved higher last week but cattle feeding margins remain modest. The supply-demand fundamentals are trending in favor of cattle feeders.

Rising production costs and steady to weaker cash prices trimmed cattle feeding margins to near breakeven levels. Pork producer margins remain solidly in the red.

Cash cattle prices declined last week for the first time in a month, but wholesale prices moved higher for the fifth consecutive week. Prices for yearling feeder cattle placed on feed topped $200 per cwt.

Wholesale beef prices continue to support packer margins even as negotiated cash cattle trade well-above the five-year average. Pork producers enjoy a market rally that has lifted margins out of the red.

Cattle feeding margins narrowed significantly last week while pork producer margins remain mired in red ink the first weeks of the new year.

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 feeding margins remain favorable despite higher costs. Tighter supplies of market-ready cattle become a growing challenge for packers as their margins are squeezed.

Cattle feeders sold more cattle last week than any week this year and at the highest price in history. Pork producers saw modest profits.