After six weeks running in the red, beef packers jumped back into positive margins after last week’s wholesale beef rally. Pork producers remain profitable.
Cattle feeders continue to gain market leverage as packers see pressure from declining wholesale beef prices. Pork producer margins remain solidly in the black.
Packers have reduced harvest and employed other tactics in an effort to regain positive margins. Pork producer margins took another step higher as lean carcass prices advance.
The spread between cattle feeding margins and beef packer margins has now reached $500 per head as packing losses increase. Pork producer margins are the highest of the year.
There’s a $400 spread between cattle feeding margins and packer margins – now in the cowboy’s favor. Cattle harvest is lower as packers reduce hours, a signal their margins are in the red.
Last week produced the lowest feed costs and lowest break evens for pigs placed in the finish barns since December 2021. Cattle feeders also saw declining feeding costs.
A year after the pandemic disrupted the hog industry and left producers facing financial ruin, operators are now experiencing a once-in-a-lifetime rally as farrow-to-finish margins climbed another $7 per head last week.
