Market Morsel: Better and worse
Beef processor margins, according to the Episode3 model, have worsened over September. This should come as no surprise as both young cattle and heavy steer pricing have made record price highs over the month. Indeed, finished steer pricing peaked at 475c/kg lwt during the month and prices have averaged 444 cents over the month, so it is largely cattle input cost pressures impacting margins at the moment.
The beef processor margin loss for August has been revised down from $324 to $312 per head of cattle processed. The better outcome for August stems from improved export pricing. As we flagged in our article last month some beef export pricing data was unavailable at the time of publishing and the increased export pricing helped to return some dollars to the processor’s bottom line.
Unfortunately for processors the relief has been short lived with the September margin widening to a $327 loss per head. This result brings the average annual processor margin to a per head loss of $307 for the 2021 season, thus far.