All classes of cattle and calves saw lower prices last month, and both feeding and packing margins declined substantially. The industry’s outlook heading into the summer months is one of caution, with increasing supplies and negative margins weighing on prices. April production costs were lower, but that was one of the industry’s few bright spots. Rising retail beef prices are a drag on a market looking for support from consumer demand. Pork and poultry production declined during April, and their retail prices increased, which helps beef ’s competitive advantage.
Long-running negative beef packer margins, however, remain one of the industry’s biggest worries. The Sterling Beef Profit Quotient suggests improving packer margins in the coming months, but feedyard margins are likely to continue flowing red ink.