Packer
Cash fed cattle prices ended last week $10 per cwt. lower than last year while the beef cutout closed $16 higher than the same week a year ago. The result? Packer margins $314 per head more than last year.
Cattle and hog feeding both saw solid average profits for the week ending April 2, boosted by higher average farmgate prices. Cattle were positive for the second week, while positive hog margins entered a third month.
Cattle and hog feeding operations are experiencing the highest market prices since before the pandemic began more than a year ago. Hog margins were positive for the 11th consecutive week.
Cattle and hog feeding operations are in the midst of their most profitable time since before the pandemic began. Cattle margins nearly doubled last week and hog margins were positive for the 10th consecutive week.
Cattle feeding margins improved with a $2 per cwt. increase in cash cattle prices while farrow-to-finish hog margins declined modestly on slightly lower lean carcass prices.
Momentum continues to build for cattle feeders as closeouts saw average profits increasing during the final week of 2021. Farrow-to-finish hog operations continue with negative profit margins.
Cattle feeders saw average profit margins exceed $200 per head last week while pork producers found losses of $44 per head, according to the Sterling Profit Trackers.
Both cattle and hog finishing estimated margins were positive last week despite rising feed costs across both enterprises. Cattle slaughter totals increased while hog processing numbers were near steady.
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.
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.
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.
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.
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 prices moved higher last week but cattle feeding margins remain modest. The supply-demand fundamentals are trending in favor of cattle feeders.
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 and hog harvest rates were lower last week with higher cash prices paid to farmers and feeders. Margins for both beef and pork packers are trending lower.
Rising wholesale beef prices and declining packing plant utilization are two indicators to watch as the 2023 cattle markets unfold.
Profit margins for cattle feeders increased as cash prices moved higher last week. Pork producers continue operating with negative margins.
Cattle feeding margins declined last week after modest declines in cash cattle prices. Pork producer margins remain underwater.
Cattle feeders experience largest average profits in seven years as packer margins dip into the red.
Profit margins for cattle feeders and packers continue pacing in opposite directions as shrinking supplies of market-ready cattle drive negotiated cash prices higher.
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 average profits of more than $300 per head last week while pork producers found average losses of about $13 per head.
Record packer margins were the tipping point to attract new capital to the business. There is now angst packer margins will be too low and these new companies won’t survive. But should we encourage government meddling?
Packers desperate to keep their grasp on the cattle market looked to their inventory to keep the pressure on cash prices. Cattle feeders reluctantly traded lower.
Cash cattle prices retreated from the previous week’s historic highs and a seasonal decline was to be expected. Analysts, however, believe another rally is brewing later in the season.
The Packers and Stockyards Act changes may be coming, as the Fiscal Year 2024 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Bill has been sent to the full House for consideration.
Set to open in 2025, the Olathe, Kan., plant will further Walmart’s commitment to creating an end-to-end Angus beef supply chain.