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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.

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 feeders saw average profit margins exceed $200 per head last week while pork producers found losses of $44 per head, according to the Sterling Profit Trackers.

Both cattle and hog finishing estimated margins were positive last week despite rising feed costs across both enterprises. Cattle slaughter totals increased while hog processing numbers were near steady.

Average cattle feeding margins improved the final week of March, while average farrow-to-finish hog margins declined modestly.

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.

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

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.

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