Pork Business
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.
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.
The extended rally in lean hog carcass prices continues and farrow-to-finish hog operations are profitable for the 12th consecutive month. Cattle feeders saw prices slip off of recent highs.
Lower average cattle prices last week cut average feedyard margins by $43 per head last week, while pork producers saw a $5 per head increase in average margins.
Modest increases in cash prices for cattle and hogs helped boost average feeding profit margins the final week of February, while margins for beef and pork packers declined.
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.
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.
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.
The pendulum continues to swing in cattlemen’s favor as cash prices rally $3 per cwt. Pork producers see improved profit margins with a $7 per cwt. rally.
The leverage shift continues to swing toward ranchers and feedyards as cattle supplies tighten and prices move higher.
Autumn’s fed cattle price rally has pushed average cattle feeding margins through the $200 per head barrier for the first time since well before the pandemic.
The highest cash fed cattle prices in seven years provided good profits for cattle sold last week but rising costs are pushing breakevens higher.
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.
Market leverage continues to shift in the favor of cattle and hog finishers, a trend that has continuously chipped away at the historic packer margins of a year ago.
Packer margins remain in the red even as wholesale beef prices rallied $9 per cwt. and cash cattle prices were near steady.
Cattle feeding margins narrowed significantly last week while pork producer margins remain mired in red ink the first weeks of the new year.
Cattle feeders are finding modest profits on market-ready cattle early in the New Year, but replacement feeder cattle prices are driving projected breakevens to eight-year highs.
Spiking wholesale beef prices the week before Christmas helped lift packer margins into the black while increasing cattle feeding margins.
Cattle prices moved higher last week but cattle feeding margins remain modest. The supply-demand fundamentals are trending in favor of cattle feeders.
Average cattle feeding margins were near steady last week despite weaker cash prices. Pork producer margins slipped further into the red as lean carcass prices dropped more than 3% for the week.
Rising production costs and steady to weaker cash prices trimmed cattle feeding margins to near breakeven levels. Pork producer margins remain solidly in the red.
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.
Negative margins continue growing for beef packers as tightening supplies of cattle support cash prices $17 per cwt. higher than the same week a year ago.
Profit margins for cattle feeders increased as cash prices moved higher last week. Pork producers continue operating with negative margins.
Cash cattle and wholesale beef prices moved higher last week, increasing profit margins for both cattle feeders and beef packers. Pork producers saw modest per head losses.
Average cattle feeding margins increased last week as negotiated cash prices set new record highs.
Cattle feeders have experienced their best month in years with prices reaching record levels. Hog producers, however, are struggling to keep margins out of the red.
As cash cattle prices have been on an upward trajectory in 2023, packer margins have correspondingly moved lower. Sterling Marketing’s weekly estimates are printing packer margins red for the first time in six years.
Rising wholesale beef prices and declining packing plant utilization are two indicators to watch as the 2023 cattle markets unfold.