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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.

Autumn’s fed cattle price rally has pushed average cattle feeding margins through the $200 per head barrier for the first time since well before the pandemic.

Market leverage continues to shift in the favor of cattle and hog finishers, a trend that has continuously chipped away at the historic packer margins of a year ago.

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.

Negative margins continue growing for beef packers as tightening supplies of cattle support cash prices $17 per cwt. higher than the same week a year ago.

Beef packers saw per head losses nearly double last week as wholesale beef prices tumbled $7 per cwt. lower. Pork processors are also found negative margins and producer margins remain short of breakeven.

Packer margins remain in the red even as wholesale beef prices rallied $9 per cwt. and cash cattle prices were near steady.

Spiking wholesale beef prices the week before Christmas helped lift packer margins into the black while increasing cattle feeding margins.

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.

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