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Beef packers continued to maintain their leverage on cattle markets heading into the holiday-shortened first week of September.

Cattle feeding margins improved $43 per head last week as cash prices gained nearly $2 per cwt.

As expected, beef packer margins jumped wildly higher the week ending Aug. 17, while cattle feeding margins slipped into the red.

Cattle feeding margins slipped further into the red last week on soft cash prices, while packer margins climbed to extreme heights.

Last week’s $2 rally in cash cattle prices helped narrow the spread between feedyard losses and packer profits.

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.

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

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 and pork producers continue to experience significant per head losses as market prices trend lower following slaughter and processing challenges from the COVID-19 pandemic.