World Perspectives
livestock

Livestock Industry Margins

Last week, beef packer margins fell for the third straight week and hovered just above breakeven levels. Margins fell about $31/head due to weaker beef prices (exemplified by a $12/cwt decline in the Choice cutout) that offset a $5/cwt decline in fed cattle prices. The drop credit for packers also worsened for the fourth straight week and contributed to the weaker margins. The fate of packers’ margins continues to rest on the beef market stabilizing from its current seasonal slump and finding robust holiday demand. Over the past four weeks, the Choice cutout has completed about 80 percent of its expected seasonal pullback, meaning additional downside should be limited. Packers certainly hope so.  Feedlot profit margins were ...

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livestock

Livestock Industry Margins

Beef packer margins improved sharply last week but remained deeply negative, with estimated net losses narrowing to -$206/head from the prior week’s extreme levels. The recovery was driven by a stronger boxed beef cutout, which rose to $371.62/cwt, while fed cattle prices moved lower on t...

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From WPI Consulting

Weighing in on strategic realignment

WPI’s team was retained by the governing board of a U.S. industry organization to review a decision, reached by vote, to invest significant assets into the development and management of an export trading company. WPI’s team conducted a formal review of this decision and concluded that the current level of market saturation would limit the benefits of the investment. Based on WPI’s analysis and recommended actions, the board subsequently reversed its decision and undertook a strategic planning effort to identify more impactful investments. On behalf of numerous clients, WPI has not only assisted in identifying strategic paths but also advised their implementation.

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