Profit margins for cattle feeders and packers continue pacing in opposite directions as shrinking supplies of market-ready cattle drive negotiated cash prices higher.
Packers have navigated through the tightest supplies of the season while maintaining profitability. Now, supplies are anticipated to increase seasonally which could swing more leverage in their favor.
Cash cattle prices declined last week for the first time in a month, but wholesale prices moved higher for the fifth consecutive week. Prices for yearling feeder cattle placed on feed topped $200 per cwt.
If a seasonal price decline develops as anticipated, this year’s starting point for cattle feeders is the best in a decade. Pork producers notch their second week of modest profits.
Wholesale beef prices continue to support packer margins even as negotiated cash cattle trade well-above the five-year average. Pork producers enjoy a market rally that has lifted margins out of the red.
Producer farrowing intentions revealed in Thursday’s quarterly hogs and pigs report show high costs and negative margins are weighing on pork producers.
U.S. House Agriculture’s Subcommittee hearing on Wednesday provided an opportunity for animal agriculture stakeholders to detail their priorities they hope to achieve from lawmakers actions.
