The Grinch is writing closeouts ahead of the holidays as cattle and hog profit margins tumble to their lowest point since the summer of 2020, just months into the COVID pandemic.
USDA issued a proposed rulemaking on Monday that would effectively close the “Product of the U.S.A.” loophole that has been in effect since the repeal of COOL in 2015.
Meat and poultry industry trade groups were quick to criticize USDA’s announcement of changes to the Packers and Stockyards Act claiming the changes add unnecessary regulations and costs.
A rally in cash cattle prices lifted cattle feeding margins more than $100 per head and left packers mired in red ink. Pork margins have held firm in the mid-$40s for six weeks.
Little change was found for livestock feeders last week as near identical week-to-week market prices held margins solidly in the black. Beef packers saw modest improvement with higher wholesale beef prices.
After briefly exceeding $400 per head, cattle feeding margins tumbled $75 last week, but the balance didn’t go to the packer as their losses increased. Pork margins held firm.
Cattle feeding margins exceeded $400 per head as cash prices improved $2 per cwt. and production costs declined modestly. Pork margins saw a slight decline but remain solidly above $40 per head.
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.
