Profit Tracker: Hogs See Lowest Breakeven Since 2020 While Beef Breakeven Prices Jump Higher

Last week’s substantial drop in the breakeven feeding cost for feeder cattle placed on feed last week is significant to the market outlook, says John Nalivka, president of Sterling Marketing Inc. “High breakeven prices together with record beef prices pose a potential problem for the market. If consumers bulk, and so far they have not to any large extent, this will pressure prices down the supply chain and lead to severe losses in the feedlot in the face of high breakeven prices, i.e. November 2015,” Nalivka says. “At the same time, I would expect stronger pork prices with stronger demand as consumers increase pork purchases.” Although the beef market has come under pressure this week, Nalivka says it is important to remember that it is the week before the Labor Day weekend and this is not out of the ordinary. “It may not be an indication of weakening beef demand,” he says. “We need to get into October to know more about demand.” Negotiated cash cattle retreated an average of $3.58