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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.

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.

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

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.

Average cattle feeding margins increased last week as negotiated cash prices set new record highs.

As cash cattle prices have been on an upward trajectory in 2023, packer margins have correspondingly moved lower. Sterling Marketing’s weekly estimates are printing packer margins red for the first time in six years.

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.