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The highest cash fed cattle prices in seven years provided good profits for cattle sold last week but rising costs are pushing breakevens higher.

Beef packer leverage is evident with cash cattle prices $7 per cwt. lower than the same week a year ago and beef cutout prices $23 per cwt. higher. Pork producers are gaining leverage with a $5 per cwt. price rally.

Cattle feeding margins were little changed from the previous week with modest profits. Hog feeding margins were boosted for a third week with another advance in lean carcass prices.

Cash fed cattle prices ended last week $10 per cwt. lower than last year while the beef cutout closed $16 higher than the same week a year ago. The result? Packer margins $314 per head more than last year.

On a percentage basis, beef packer margins declined significantly last week. It’s all relative, of course, since the starting point from the previous week was stunning.

Profit margins for both cattle and hog finishing operations saw modest gains last week but also carry significantly higher feed costs than a year ago.

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 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.

Cattle feeders saw their margins shrink $70 per head last week as a modest increase in market-ready supplies led packers to sharply cut their negotiated purchases.