Cattle feeding profit margins exceeded beef packer margins last week for the first time in more than two years as cash cattle prices have increased 20% since September.
Beef packer profit margins fell to their lowest level in nearly two years last week while cattle feeding margins exceeded triple digits for the second consecutive week.
Cash cattle prices lost another $2 per cwt. last week, a decline of $7 over two weeks. Coupled with higher input costs on feeder cattle, the decline feedyards with an average $22 per head loss last week.
Cattle feeders continue to find modest profits on a cash basis despite last week's $2 per cwt. market retreat.
Cash cattle prices stubbornly steady to $1 higher gave a slight boost to feedyard margins and left packer margins nearly unchanged last week.
Sharply lower cash cattle prices erased $100 per head from closeout profit margins last week and left cattle feeders re-evaluating ideas of a spring rally.
Cattle feeding margins jumped $72 per head higher the week ending Jan. 25 as the value of feeder cattle calculated against those closeouts declined $8 per cwt.
Despite a $2 decline in cash fed cattle prices, feedyard closeouts reported positive mid-winter results while packer margins held firm.