Cattle and hog finishing margins were headed in opposite directions last week, with lean hog prices enjoying a three-week rally while cattle prices were stuck in neutral for a second week.
Beef packer leverage is evident with cash cattle prices $7 per cwt. lower than the same week a year ago and beef cutout prices $23 per cwt. higher. Pork producers are gaining leverage with a $5 per cwt. price rally.
Cash fed cattle prices ended last week $10 per cwt. lower than last year while the beef cutout closed $16 higher than the same week a year ago. The result? Packer margins $314 per head more than last year.
Cattle feeders were left on the sidelines as every other cattle/beef market segment saw a price rally. Futures markets set new highs, but cash cattle have not reached $112 for seven months.
Negotiated cash fed cattle traded $2 higher in the South during the holiday-shortened week. Futures markets appear supportive and asking prices will be higher in the days before New Year's.
On a percentage basis, beef packer margins declined significantly last week. It's all relative, of course, since the starting point from the previous week was stunning.
Despite a disappointing end to 2020, a positive story is unfolding for the cattle markets in 2021. Sue Martin and DuWayne Bosse explain why the last half of 2021 could produce better prices.
Estimated cattle industry losses due to COVID-19 will reach $13.6 billion, according to a study by ag economists conducted to assist USDA in determining how best to allocate CARES Act relief funds to cattle producers.
