Beef packer margins abandoned their two-week streak of positive numbers and fell $102/head last week to -$47. The move was expected as the Choice cutout was steady/weaker across the week while fed cattle prices jumped $8-10/cwt higher. The weaker margins are still not as bad as recent history, however, and are in-line with values recorded for most of 2024. WPI does not have evidence of this, but our feeling, based on conversations with industry players, is that economist-estimated margins of -$30 to -40/head are actually breakeven or slightly profitable. The reasoning is that such margins are likely within the range where plants can either make minor tweaks to labor and staffing or procurement strategies and turn a profit. Or, packers&rsquo...
What You Need to Know Today: The corn and soybean markets closed slightly higher in low-volume trade. The wheat market was mixed, with HRW continuing its downward trek on improved moisture. As expected, the bearish cattle on feed report drove down cattle prices and pulled hogs down with it. Mi...
Monday, 25 May is a U.S. holiday, and both the markets and our office will be closed. Please note that the next issue of Ag Perspectives will be published on Tuesday, 26 May. The WPI staff wishes everyone a safe and enjoyable holiday weekend...
USDA’s monthly cattle on feed report was released today. The total number of cattle on feed in feedlots with 1,000 head or more capacity amounted to 11.6 million head, 102 percent of last year. Source: USDA, WPI Placements were up, but part of that is attributable to persistent drought c...
From WPI Consulting
Forecasting developments in production agriculture
On behalf of a private U.S. agricultural technology provider, WPI’s team generated an econometric model to forecast the movement of concentrated corn production north and west from the traditional U.S. Corn Belt. WPI’s model has subsequently provided quantitative support to a multi-million-dollar investment into short-season corn variety development. WPI’s methodology included a series of interviews with regional grain elevators and seed consultants. Emphasizing outreach and communication with stakeholders who possess intimate sectoral knowledge – on-the-ground insights – is a regular component of WPI’s methodologies, made possible by WPI’s ever-growing network of industry contacts.