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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.

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 wholesale beef prices and declining packing plant utilization are two indicators to watch as the 2023 cattle markets unfold.

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.

Cattle and hog harvest rates were lower last week with higher cash prices paid to farmers and feeders. Margins for both beef and pork packers are trending lower.

Cattle feeding margins narrowed significantly last week while pork producer margins remain mired in red ink the first weeks of the new year.

Spiking wholesale beef prices the week before Christmas helped lift packer margins into the black while increasing cattle feeding margins.

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.

Packer margins remain in the red even as wholesale beef prices rallied $9 per cwt. and cash cattle prices were near steady.