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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.

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.

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.

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.

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.