Packer
The summer slump has cut average industry cattle feeding margins by a third yet profits remain historically large. Pork margins also retreat from recent highs.
The CyberStrike debacle that grounded planes and shuttered various operating systems likely contributed to the stumbling futures market that incited early week cattle trades.
With light trade the norm for weeks, packers pushed for inventory, unusual behavior for a packer when the market is working lower.
It’s a good sign for the supply chain as analyst estimates of packer margins suggest profits in the $20 per head range in recent days.
When any government agency starts the rule-making process, particularly when it concerns markets, it is time to pay attention.
Last week’s market reached new all-time highs and asking prices will be higher this week.
The outside trades of $186 in the South and $193 in the North are a telling sign that leverage is there for the cattle feeder. Given the chance to capitalize with multiple bidders the market should respond favorably.
Cash prices leaked $1 lower but Friday evening trades suggest packers still scramble to meet their needs and are willing to add freight to do so.
JBS said on Wednesday that Beijing blocked U.S. beef shipments from the company’s plant in Greeley, Colorado, because traces of the feed additive ractopamine were identified in beef destined for China.
The use of camera grading in America’s beef plants has improved the accuracy, precision and consistency of grading from plant to plant and from lot to lot of cattle, regardless of where they were harvested.
A solid rally for cash fed cattle coupled with declining total feeding costs helped boost cattle feeding margins nearly $85 per head above the previous week. Pork margins now over $40 for the fourth consecutive week.
Shorter production and processing schedules have produced the desired effect for packers – a rally in wholesale beef markets. Feeders gain more marketing leverage.
Shares of Brazil’s JBS SA rose 7% in early morning trading on Wednesday after the world’s largest meatpacker reported strong first-quarter results in spite of headwinds faced by its large U.S. beef business.
The Meat Institute has updated its Animal Handling Guidelines and Animal Welfare Audit to include scores for each criterion allowing members to set goals.
Harvest picks up and packers are now finding themselves trying to bridge the gap between yearlings and calves. Smaller showlists create a challenge for packers.
The Meat Institute has worked to educate member companies to improve age and identity verification and develop new programs and technology to detect identity fraud and more.
Batista brothers have been elected to JBS SA board of directors.
This growing beef-on-dairy health problem is costing packers two major things – time and money.
Declining cattle futures provided leverage for packers to collect inventory with softer bids.
The margin spread between packer losses and feedyard profits expands as wholesale beef prices continue their retreat. Pork producer profits continue increasing.
Under pressure from negative margins, packers will continue to play their games but their activity last week led to the biggest harvest rate in seven weeks.
Does more negotiated cash cattle trading benefit feeders or packers? An evaluation of packer gross margin provides some perspective.
Last week’s rally to new record prices pushed packer and feeder margins in opposite directions. Pork producer margins continue higher with prices now above year ago.
Cash fed cattle prices reached new record highs in all feeding regions last week, but the trade was a bracket-buster for packers who were forced to pay up as wholesale beef prices declined.
Firefighters were dispatched to National Beef’s 6,000-head per day facility in Liberal, Kansas, Wednesday evening.
The economic environment of both the beef and pork industries has changed. Capacity utilization for both beef and pork has a significant impact on margins and the market impact goes beyond supply and demand.
Beef packers slow harvest lines and scramble for inventory as they attempt to keep a lid on cash prices.
Similar to last year, packers have idled the harvest pace lower in an effort to keep prices in check. The strategy favors more late-week trading.
Calling the packers’ bluff, cattle feeders held out for higher bids and were rewarded with the highest prices in over three months.
Improving prices for live cattle and wholesale beef lifted margins for both feeders and packers. Pork producers also found improved margins but remain in the red.