Beef - General
Sharply lower cash cattle prices erased $100 per head from closeout profit margins last week and left cattle feeders re-evaluating ideas of a spring rally.
Based on cash sales of $108.77, cattle closeouts lost an average of $90 per head the week ending March 15.
Declining cash fed cattle prices erased profit margins for cattle feeders last week, and declining wholesale beef prices cut packer margins by 34%.
Sharply higher beef cutout values produced windfall profits for beef packers last week while cattle feeders saw closeouts with average losses about steady, according to the Sterling Beef Profit Tracker.
Cattle and hogs prices both moved higher last week and both enterprises posted profits on closeouts for the first time in several months.
Cattle and hog finishing margins are both modestly positive for the seventh consecutive week, though hog margins saw a slight decline with lower lean carcass prices.
Cattle feeders saw modest profits for the 10th consecutive week, a headline-worthy observation in normal times. The beef complex is not operating in normal times.
Cattle and hog feeding operations saw their margins remain modestly profitable last week with little movement in cash prices. Both cattle and hog feeding margins are higher than last year at the same time.
Closeouts on cattle and hogs marketed last week remain modestly profitable for the sixth consecutive week, according to calculations by Sterling Marketing.
Cattle and hog finishing margins were modestly positive the first week of December, marking the 11th consecutive week of profitability. Packer margins remain historically high.
Beef packer leverage is evident with cash cattle prices $7 per cwt. lower than the same week a year ago and beef cutout prices $23 per cwt. higher. Pork producers are gaining leverage with a $5 per cwt. price rally.
Cattle feeding margins improved $60 per head the week ending Feb. 12 and hog margins reported profits for the second consecutive week as lean hog prices rallied.
The leverage shift continues to swing toward ranchers and feedyards as cattle supplies tighten and prices move higher.
Higher cash cattle prices and lower wholesale beef prices have erased much of the historic profits beef packers saw last year, according to estimates by Sterling Marketing, Inc.
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.
The pendulum continues to swing in cattlemen’s favor as cash prices rally $3 per cwt. Pork producers see improved profit margins with a $7 per cwt. rally.
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.
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.
Negative margins continue growing for beef packers as tightening supplies of cattle support cash prices $17 per cwt. higher than the same week a year ago.
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.
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.
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.
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.