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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.

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.

Average cattle feeding margins improved the final week of March, while average farrow-to-finish hog margins declined modestly.

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.

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.

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.

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.

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 leverage shift continues to swing toward ranchers and feedyards as cattle supplies tighten and prices move higher.