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Cash cattle and wholesale beef prices moved higher last week, increasing profit margins for both cattle feeders and beef packers. Pork producers saw modest per head losses.

Rising wholesale beef prices and declining packing plant utilization are two indicators to watch as the 2023 cattle markets unfold.

Average feed costs for finishing cattle and hogs are 25% to 28% higher than the same week last year, according to Sterling Marketing’s weekly calculations.

The average cost of feeding a steer to finish weight was 25% higher for cattle marketed last week and is projected to be 31% higher for cattle placed on feed last week at roughly $600 per head.

Cattle prices moved higher last week but cattle feeding margins remain modest. The supply-demand fundamentals are trending in favor of cattle feeders.

Rising production costs and steady to weaker cash prices trimmed cattle feeding margins to near breakeven levels. Pork producer margins remain solidly in the red.

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 feeding margins remain favorable despite higher costs. Tighter supplies of market-ready cattle become a growing challenge for packers as their margins are squeezed.