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Market leverage has shifted dramatically toward ranchers and cattle feeders over the past two months. The combination of rising cattle prices and declining wholesale beef prices has eroded historic packer margins.

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.

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.

The pendulum continues swinging toward cattle feeders as cash prices jumped $3 last week and left packers with their largest negative margins in nearly six years.

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.

Cattle feeders sold more cattle last week than any week this year and at the highest price in history. Pork producers saw modest profits.

Cattle feeders saw their margins shrink $70 per head last week as a modest increase in market-ready supplies led packers to sharply cut their negotiated purchases.

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.