November 15, 2025
THE MARKETS
Packers bought cattle $3-5 lower live and $5-10 lower dressed this past week. Sales live in the north were mainly at $225 and in the south mainly at $228. Dressed sales ranged from $351-$355 — $7-9 lower. Many of the excess numbers in the north were cleaned up and the purchases provided many of the plants in the south with inventory for slaughter in areas where supplies are the shortest. One of the scariest aspects of last week’s market action is the general agreement among market analysts that last week marked an interim low for fed prices and they will rebound into year’s end. Beware when everyone agrees on market direction.
The movement in fed prices has mostly benefited the processors who now see the first positive margins in several months. The “may hay while the sun shines” stimulated slaughter volume turning in the largest slaugther since mid summer. This past week’s slaughter at 576,000 head was up 16,000 from the previous week and 32,000 — still well under last year. Two factors are changing the availability of finished cattle — heavier marketing weights and placement of large amounts of dairy beef crosses that are on feed for a year resulting in slower turnover.
CATTLE FUTURES
All of the technicians expected the December contract on Friday to test $215. It did, and held, rallying several dollars to close just under $220. According to technical patterns, the direction in the coming week should be higher, but in the current environment when the most causual news can storm the market, anything can happen.
Benchmarking. On Tuesday of each week, USDA releases a weighted average price report for all cattle sold the previous week. The report summarizes the distributed price levels for each category of sale such as Negotiated/Formula/Forward Contracts. Beef producers are able to measure the marketing price for their cattle compared to the national averages.
The Comprehensive Fed Cattle Weekly Report offers the most current information on the current status of fed cattle being harvested. The report is published each Tuesday and includes the previous week’s change in carcass weights and quality grading. The latest report shows carcass weights at 950#, 2# higher than the prior week, and 24# heavier than last year. The combined steer and heifer weights can easily be influenced when the proportion of steers to heifers in the weekly slaughter changes. Quality grade was up .5% from the previous week at 85.2% . This is one of the highest grading weeks of the year.
The Weekly Steer and Heifer Grading Report is indicative of regional supplies of choice and prime cattle and often is determinative of regional differences is live price. The report is also reflective of the current status of fed cattle offerings in each area.
Forward Cattle Contracts: Forward contracts will always bear some relationship to the corresponding futures month closest to the delivery month for the cattle. Basis levels will move up and down as processors want to add to forward contracts or not. The driver in forward purchases of cattle will always be forward sales of beef. Packers will always be willing to take a price risk off the producer’s plate in return for an extra margin.
The volatility in futures prices has caused more interest from cattle owners in forward contracting. During the past two to three years, fewer cattle have been forward sold as most producers anticipate higher prices in the future months. Some owners now are willing to set the price for future deliveries with basis levels to the futures varying by region. The problem that will slow forward contracting is the heavy discount held by the deferred live cattle contracts.
Formula and Negotiated Grids. The Price and Distribution Report delineates the various selling methods and net results.
The Cattle Contracts Report details the percent of contracts by volume of cattle and by number of contracts for selling cattle. Formula selling that was once the largest marketing method and still is, but is losing ground to negotiated grids where the premiums and discounts are set but the base price is negotiated.
If beef demand should improve heading towards the holidays, the middle meats should provide support for the cutout. Prime cuts are carving out a larger slice of the grocery offerings. Holidays provide an opportunity for many families to spurge on food purchases. Nothing creates more good will at Thanksgiving than finding a prime rib roast along side the turkey.
There are some changes apparent in supermarket marketing plans for beef. Some have to do with price and others related to the increasing weight of the carcasses. More of the carcass is dedicated to the grind and retailers are packaging larger packages of ground beef to encourage larger dollar purchases. They also are offering more blend ratios. On the middle meats some of the steaks are changing how they are presented to the consumner. Many of the ribeyes have the lip trimmed because if it is included, the cut is too large.
The Cutout. Box prices were lower feeling the weight of the large slaughter last week. The supply of beef is being carefully managed by the processors. More emphasis is expected to be focused on the middle meats as we move towards the holidays.
Replacement markets
Feeder futures have made a large adjustment downward in price, but a large segment of the replacement market refused to follow. Many heavier replacement cattle lost ground, but many of the lighter offerings have stubbornly refused to weaken. Some light weight calves are reaching back towards record levels. On the fundamental side, auction market receipts are down as are country movement of cattle — leading to sharp reductions in placements. There is little evidence of reaching or passing the low point in replacement numbers.
Occupancy levels are falling in all regions but especially in Texas. The purchase of a 800# steer on today’s market given today’s feed cost would result in a $250 loss if the animals were hedged. Some operators would prefer to look at an empty pen. Some bankers would agree. Those who do choose to place cattle on feed, must gamble with equity on a rise in prices by next year when the cattle will sell.
The drought monitor continues to favor herd expansion. Some dryness has developed in the southern plains. Chances are good that the slow rebuilding of the nation’s cattle herd is now morphing into full throttle rebuilding and those forecasting recovery several years away will find it happening sooner rather than later.
Compared to last week: Feeder steers and heifers steady to 5.00 lower in a light test. Steer calves 5.00-10.00 lower. Steer calves started the day dollars lower and steadily improved throughout the day. Heifer calves unevenly steady. Today offerings included some really nice ranch raised calves that were weaned at steady money to last week. Buyers were being very selective for quality. Quality has ranged from plain all the way to attractive. Condition was from average fill unweaned calves to full condition weaned calves. Futures are trading limit up today. A cold front has moved into the trading area, as temperatures dipped into the lower 20s this morning. Supply included: 100% Feeder Cattle (57% Steers, 39% Heifers, 4% Bulls). Feeder cattle supply over 600 lbs was 41%.
Compared to last week: Steer calves under 500lbs not enough to test. Steers 500-650lbs unevenly steady, over 650lbs 10.00 higher. Heifer calves under 500lbs 10.00-15.00 higher. Heifers 500-600lbs 3.00-7.00 higher, over 600lbs 20.00 higher. Today’s sale could best be described as erratic, beginning dollars lower before gaining momentum and closing on a positive note. Buyers remain cautious and unsure whether CME futures will maintain their recent positive trend. Demand was strongest for heavier cattle today. There was cattle for everybody but overall quality was mostly plain. Integrity Beef held their annual sale today, all cattle with the description Value-Added were part of their sale but not included in the trend. Quality ranged from average to attractive, and condition was mostly full. Supply included: 100% Feeder Cattle (50%Steers, 44% Heifers, 6% Bulls). Feeder cattle supply over 600 lbs was 36%.
Feeder Cattle Futures. Futures were in rally mode with the rest of the market. A higher erratic feeder board is struggling to adjust to negative sentiment that is driving futures lower and a critical shortage of replacement cattle that is trying to hold up cash prices.
The lack of liquidity in the feeder contract provides a perfect environment for prices to move too far in either direction. Poor liquidity leads to extreme volatility. Overdone directional price movements frequently require corrections and traders sense the vulnerability of the contract that needs to be cash settled but the contract index needs a redo.
Feeder Cattle Cash Index. The index is tracking the moves in cash prices.
Video and Internet Replacement Cattle Auctions. The movement from traditional private treaty sales to Internet auctions has been slow but steady. Producers have chosen this option as the primary marketing tool for most of the cattle offered in the replacement markets. The market that was once dominated by one firm has seen new competition from multiple trade platforms.
National Weekly Feeder Summary released on Friday of each week tracks the national prices by region for last week.
Grain Futures. Corn prices fell following the USDA crop report that raised beginning stocks and barely lowered the crop yield estimates. This year’s crop remains well above the 14.5 billion bushel crop last year. Harvest is moving to the final stages as hot and dry weather are ideal for bring in the crop. Elevators are holding the basis flat. Corn basis levels in Guymon, Oklahoma are at +$.60 — basis the December contract.
OPERATING MODE TO CHANGE
The pressures of the marketplace are moving from processing to feeding. The same stressors operating on beef plants, namely overcapacity, is now beginning to drive large changes in the operating environment of feedyards and pasture operations. The supply of replacement cattle is now entering its final phase of shortages before beginning the process of rebuilding.
Feedlots are left with insufficient numbers of cattle and must fight and compete daily for the shortfall of cattle. This forces them to overpay for feeder cattle and, with each purchase, to build in a negative margin at the end of the feeding period. Some of the feedlots will lock in losses while others will buy and hope. Occupancy levels will fall and some feedyards will close. Feedlots that have relied on custom feeding will be forced to own more of the feedlot inventory.
Stocker operators will also face challenges as calf numbers reach the low point in the cycle. High prices for calves that refuse to fall with the decline in the feeder board leaves stocker operators with little relief and causes many farmers who have always run cattle on wheat fields to leave those fields unstocked this winter. Ultimately, the decision not to graze this winter, will play out next spring when feedlots find limited availability of replacement cattle.
Downsizing is never fun or painless. The best hope for those operating in the live cattle sector is a soft landing but volatility in the markets will be a common characteristic of the bottom of the cattle cycle — made worse by an administration focused on lowering beef prices. The survivors will be the best managed operations that have sufficient capital for hard times.
CATTLE REPORT LIBRARY
Change is a necessity for any sustainable industry and sometimes necessary changes encounter obstacles in the form of stalwarts who refuse change. The Cattle Report has created a library page of opinions pieces published on these pages advocating fundamental and structure changes for the industry.
NOTE TO READERS
Sections of the newsletter are designed with hyperlinks to the appropriate source pages. The hyperlinks are in light blue within the report.
EXPLANATIONS OF BREAKEVEN/CLOSE OUT TABLES
Regional differences in grain and cattle basises create a difficulty in modeling a national composite for current close outs or a proforma forward look at a breakeven. Readers should consider your own area for adjustments to these models. Most calculations are basis relevant prices in Guymon, Oklahoma.
CURRENT BREAKEVEN PROJECTION
The Cattle Report introduces the FEEDER METER. The report estimates profit or loss for currently purchased feeder steers and projects a result 180 days out. The chart is interactive and updated every 15 minutes in real time based on changes in futures markets in grain and cattle. Corn basis information is based on current trade prices adjusted every two weeks. Feeder prices are based on the USDA index price for 800# steers and fed cattle sales are $2 cwt. premium the appropriate futures contract.
CURRENT CLOSE OUT
The Cattle Report estimates current profit or loss on cattle placed on feed 180 days ago. This report generated from industry averages attempts to simulate a typical close out based on the feeder index for 800# steers 180 days ago. The close out assumes grain was purchased at market each month. Selling prices and interest rates are based on prevailing benchmark quoted prices. This chart will change weekly.
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