Search - Drovers

Despite an average $1 decline in cash fed cattle prices last week, cattle feeding margins remained solidly profitable on a cash basis.

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.

Cattle feeders continue to find modest profits on a cash basis despite last week’s $2 per cwt. market retreat.

Cattle feeders and beef packers are both experiencing modest mid-winter profits, though both margins were slightly lower on cash prices of $121.

Despite a $2 decline in cash fed cattle prices, feedyard closeouts reported positive mid-winter results while packer margins held firm.

The combination of shrinking packer profits and smaller feedyard losses over the past six weeks has reduced the packer/feeder margin spread by 27%, according to the Sterling Beef Profit Tracker.

Last week’s $1 increase in cash fed cattle prices did little for feedyard profits, but the $6.40 rally in wholesale beef prices added another $25 onto already large packer margins.

Beef packers saw their margins decline to the lowest level since before the Tyson packing plant fire August 9 as beef cutout prices declined and cash cattle prices increased.

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.