CASH live cattle prices soar to new all-time highs in an active Tuesday trade not seen in a long time. The action again illustrated the leverage that cattle feeders have over packers. Packers threw in the towel and essentially paid whatever was offered and priced by producers, says Bob Wilson, HedgersEdge.com. Prices were $4-11 per cwt higher than the average prices from the prior week. Full price ranges were $250-$255 per cwt live on the Southern Plains and $250-257 per cwt live in the Corn Belt, with the majority of the trade occurring at $255 per cwt Dressed trade started with prices at $395-396 per cwt then raced to $400 per cwt. Wednesday saw a light trade, mostly up north, at similar price levels.
USDA reported Tuesday sales of 55.650 head, with 41,926 of those up north. The previous week saw live cattle prices slightly lower than the week before. The 5-area steer prices averaged $246.18 per cwt live or $386.00 dressed. These were down $1.84 per cwt and $2.14 per cwt, respectively, from the week before. Meanwhile, fed cattle graded a record high percentage of Prime and Choice for the ninth week in a row. For the week ended April 18, cattle graded 15.02% Prime (breaking 15% for the first time) and 73.34% Choice. The total of 88.36% exceeded the prior week’s record of 88.30%.
Packer Margins Deteriorate Again
Slaughter levels remained low last week. A wildcat labor issue at Cargill’s Fort Morgan, Colo., beef processing plant had activity there shut down but likely did not impact kill numbers. Cattle slated for processing there were shifted to other locales, says Wilson. The end effect of the exceptional live cattle cash moves may be to stymy and slow production yet again. The early week estimates for total harvesting levels for last week were coming down. Packer margins continue to run negative by triple-digit losses per head and these will likely accelerate to the downside, he says. Margins were calculated to be a negative $187 per head Thursday morning.
The comprehensive cutout (cuts, grinds and trim) the week before last averaged $385.95 per cwt, down $4.20 per cwt from the prior week. The Choice cutout averaged $382.30 per cwt, down $4.11 per cwt. Spot market sales accounted for 29.1% of the total volume of 6365 loads of cuts, grinds and trim. Formula sales accounted for 54.6%, forward sales accounted for 16.3% and export sales accounted for 13.5%. The Choice beef cutout in the face of substantially higher live cattle cash prices posted lower prices on Tuesday and Wednesday.
Clean-up trade for boxed beef products remains elusive and several items remain on push lists, says Wilson. Price support for the Choice beef cutout is seen at $378 per cwt, with next level at $365 per cwt. Price resistance is seen at $405 per cwt. For packers to catch a breakeven level on their margins against the input costs of paying $255 per cwt live for fed cattle, the Choice cutout would need to match the highs seen last year at $415 per cwt, he says.
Indications were that activity at the retail meat counter was adequate the weekend before last but almost exclusively on featured items, says Wilson. Pay-day weekend was last weekend, and hopes remain high with Mother’s Day falling only a week later and graduation ceremonies ramping up. The water on the fire lies in the cost of travel to go see Mom and the graduates, he says. Gas prices, airline fares and generally higher tabs for social activity still have a sticker shock effect on consumers, he says.
CANADA AND AUSTRALIA SEE FOOD INFLATION
FOOD inflation, with a large year-on-year increase in beef prices, continues to be a target of the Trump administration and some members of Congress. But calls for investigations haven’t yet resulted in any formal moves. Not surprisingly, beef prices in Canada and Australia have caused similar increases in food inflation this year. Canada’s March Consumer price index (CPI) showed modest overall inflation at 2.4% but much sharper increases for food at retail (4.4%). This was driven primarily by beef prices, which rose nearly 13% year over year. Beef prices for consumers are up 64% since the first quarter of 2021. This is more than triple the rise in overall CPI, says Canadian market analyst Kevin Grier.
Canadian retail beef prices have probably increased about 77% since 2021, far outpacing consumer price increases, says Grier. This suggests retailers have absorbed some cost pressure. With retail prices typically lagging wholesale changes by about three months, more consumer increases are likely on the way. Analysis of front‑page grocery flyers, which reflect where most meat volume is sold, shows the following: featured beef prices rose 52% since 2021, compared with 40% for chicken and just 12% for pork. Despite sharply higher costs, beef’s presence in flyer merchandising has declined only marginally, indicating grocers continue to rely on beef to attract customers, he says.
Meanwhile, latest CPI data released by the Australian Bureau of Statistics shows that red meat price rises have been a big contributor among food and beverage items to inflation, says Beef Central. The latest CPI data found that overall inflation in Australia rose 4.6% year‑on‑year in March, accelerating sharply from 3.7% in February and reaching its highest annual rate since September 2023. Within the food basket, meat and out‑of‑home meals were the largest contributors to food price inflation in the data, says Rabobank food retail analyst Michael Harvey.
Meat prices, notably beef and lamb, continued to run at double‑digit inflation rates, hitting 11.8% year-on-year, supported by strong local livestock markets, says Harvey. Coffee prices were another large contributor, surging 10.7% year‑on‑year in March, reflecting the pass‑through of global pricing pressures. While headline annual inflation rose sharply in the March CPI data, the re-acceleration in inflation was not food-led, with overall food price inflation remaining similar to levels recorded since mid-2025. Overall food price inflation was found to have remained entrenched at slightly above 3%, the same level it has held for ten consecutive months, says Harvey. However, further price inflation may be likely across several food categories in coming months due to higher costs impacting the food supply chain from the Middle East conflict. The conflict is pushing up fuel and fertilizer costs at the farm level. These pressures are also lifting post‑farmgate costs for food and beverage manufacturers via processing, distribution and packaging, he says.
JBS FACES POSSIBLE STRIKE
AFTER finishing a collective bargaining agreement at its Greeley, Colo., beef processing plant earlier in April, JBS USA is back in contract negotiations with the union representing workers at a different facility. According to United Food and Commercial Workers (UFCW) Local 7, union members voted 97% in favor of going on strike at Denver Processing, a pork and beef case ready plant owned by JBS USA. The plant provides meat products for Kroger stores throughout the Southwestern U.S., including King Soopers and City Market stores in Colorado, Fry’s Food and Drug Stores in Arizona and Ralphs Grocery Company in California.
Workers are prepared to take immediate and serious action if Denver Processing continues to violate federal labor law and prevent workers from securing a fair contract, the union said in its statement. The timing of any strike will be determined at a later date. JBS expressed its disappointment with UFCW Local 7 for pursuing another strike rather than productive conversations at the bargaining table. If this strike comes to fruition, it would mark the fifth strike initiated by this same union in just four years across multiple employers, raising serious concerns about whether their focus is truly on achieving the best outcomes for employees or on creating unnecessary disruption, a JBS spokesperson said.
PACKAGED MEATS THRIVE FOR SMITHFIELD
PACKAGED meats are increasingly the profit driver for Smithfield Foods, the world’s largest hog producer and pork processor. So it proved to be in Smithfield’s 2026 first quarter ended March 29. Smithfield reported net income of $249M, equal to 63 cents per share on its common stock, up from $227M or 57 cents per share a year ago. Revenue rose 0.8% year-over-year to $3.80 billion, compared to $3.77 billion in 2025. Smithfield’s operating profit increased to $333M in the first quarter, compared to $321M during the same period last year. Meanwhile, operating margin increased to 8.7% compared to 8.5% the year prior.
Smithfield delivered record first quarter results through disciplined execution across the business, led by strong performance in Packaged Meats, said Shane Smith, president and CEO of Smithfield Foods. Adjusted operating profit reached a first quarter record, underscoring the strength of its vertically integrated model. This performance reflects the actions its team is taking to drive profitable growth while navigating a dynamic operating environment, he said.
Smith detailed how the pork processor is working through rising costs across the supply chain. Smithfield continue to navigate a challenging external environment with the Middle East conflict adding another layer of macro volatility, he said. For Smithfield, that flows through higher freight, packaging and agricultural input costs. But its experienced team is managing through this the same way it has in past cycles, through pricing and mix, disciplined spending, productivity initiatives, hedging and contract and procurement actions. Consumers continue to be cautious and Smithfield is focused on delivering value and nutrition for families, said Smith.
Packaged Meats Has 12.8% Margin
Smithfield’s Packaged Meats segment reported $2.15 billion in revenue, up 6.2% from last year’s $2.02 billion. Operating profit stood at $275M million year-over-year compared to the previous year’s $266M, with an operating margin of 12.8% compared to 13.1% in the first quarter of 2025. A great example of this is converting large holiday hams into products like prime fresh lunch meat, which increases units and purchasing occasions while expanding margins, Smith told analysts on an earnings call. Coming out of 2025, Smithfield saw strong momentum in these value-added categories and that carried over into 2026., he said. Raw material costs were up by $94M year-over-year, said Steve France, president of packaged meats at Smithfield.
Smithfield’s Fresh Pork segment reported a decline in earnings from 2025. Operating profit for the unit declined 4.3% to $78M from $82M last year, while sales were slightly lower at $2.01 billion in the quarter, versus $2.03 billion in 2025. The segment’s operating margin was 3.9%, compared to 4.0% a year ago. Smith said the strategy to grow operating profit includes growing volume in its retail channel, focusing on higher margin, value-added case-ready and marinated offerings, and expanding adjacent channel opportunities such as pharmaceuticals and pet food. Other options included implementing automation and driving plant efficiency along with yield optimization and supply chain savings. The third Smithfield business unit, Hog Production, reported an operating profit of $4M in the first quarter of 2026, compared to $1M in the same period in 2025. However, revenue declined 17.5% to $769M compared with $932M the previous year. Operating profit margin was 0.5%, up from 0.1% in 2025.
Meanwhile, the affordability of and strong demand for chicken benefitted Pilgrim’s Pride Corp., a subsidiary of JBS S.A., in the first quarter of 2026, despite facing volatile commodity markets. During the quarter, chicken demand continued to be healthy across all regions, said Fabio Sandri, Pilgrim’s president and CEO. Overall business fundamentals remained positive given chicken’s affordability, consumer momentum in retail and foodservice and ample grain supplies. Equally important, Pilgrim’s made significant progress on its growth and portfolio projects, reinforcing the foundation for a more resilient earnings profile, he said. For the three months ending March 29, Pilgrim’s reported a profit of $101.4M, equal to 43 cents per share, which was down significantly compared to last year’s $296M and $1.24 per share. Total revenue reached $4.5 billion, up 1.6% year-over-year.
WH LAYS OUT FERTILIZER PLANS
THE vast majority of America’s farmers and growers use fertilizer in some form or other. So escalating fertilizer prices because of the blockade of the Strait of Hormuz has caused increasing hardship for many farmers. That’s why White House officials last Tuesday laid out plans to increase access to fertilizer and lower prices. Agriculture Secretary Brooke Rollins held a press conference with three other Cabinet members, a White House economic adviser and members of Congress to highlighting a coordinated push across the Trump administration on fertilizer challenges.
This is an all-of-government approach, and obviously, as a Reagan conservative, she cringes a little bit about saying the government is here to help you, said Rollins. But in this case, this is an instance where there is a massive gap in the market and the national security implications of this are real, she said. DTN earlier reported that nitrogen prices are spiking. Anhydrous ammonia, for instance, broke above $1100 per metric ton the week before last, which is 30% higher than it was at the end of February.
Detailing various projects and moves tied to fertilizer, Rollins said she believes that in short order, in the next year to two years, projects being developed could expand domestic nitrogen fertilizer capacity by 30%, domestic potash production by more than 100% and phosphate production by 200%. This is real-world change for farmers and ranchers and for America’s rural communities, While prices spiked after the war with Iran began two months ago, Rollins said the problem of high fertilizer prices didn’t begin in the last 60 days.
Rollins pointed to short-term moves the administration has made, such as extending the waiver on the Jones Act to move fertilizer more freely from port to port. At least some reports showed companies used that waiver in April to move anhydrous ammonia, she said. The administration also waived restrictions on fertilizer from Venezuela, and Secretary of State Marco Rubio and Treasury Secretary Scott Bessent had gotten companies to commit to sending both urea and sulfur in pending shipments from Venezuela. Rollins said that move would quickly boost urea supplies. The administration believes, based on current data, that this will fill about 57% of the April-to-June urea gap, she said. She also credited CF Industries for delaying maintenance at an ammonia plant in Louisiana to produce another 100,000 metric tons of nitrogen fertilizer. CF Industries is also moving forward with an ammonia plant that will add 1.4M mt of capacity next year.
WH Will Lower Burdens
In other comments, Commerce Secretary Howard Lutnick, Interior Secretary Doug Burgum and EPA Administrator Lee Zeldin each said the Trump administration will lower regulatory burdens and speed up permitting processes for fertilizer manufacturing and mining in the coming months. Lutnick committed funds to help incentivize domestic production. Rollins said the Commerce Department would invest more than $1 billion in infrastructure assistance to help develop more fertilizer projects. The administration is going to invest in domestic fertilizer manufacturing, said Lutnick. So, if we can strengthen our domestic supply chains, our investment accelerator will create more manufacturing domestically. Here, we’re also making sure we cut red tape so we can build and do it here quickly so we can provide the relief that our farmers need to make sure they’re feeding America, he said.
Interior Secretary Burgum said his department is committed to quickly permitting mining projects that would spur the production of potash and other critical minerals as well. Everybody here knows we have a permitting problem. We’re in a position where our supply chains are too dependent on others, in particular China, controlling not only minerals but the processing. Despite reducing the permit times, Burgum said moves to strengthen domestic supply chains would still protect the environment. We can go faster and we can protect the environment. There is no trade-off there, he said.