January 29, 2026
MARKETS
A few bids at $236 in the north were refused opening the door for higher prices this week. Packers never want to tip their hand on inventory in their pocket. Actions speak louder than words. Show lists were up in Texas, down in both Kansas and Nebraska. The industry will now transition into a nationally reduced slaughter capacity that should make all processing more efficient, but will not increase the supply of cattle. Each plant will adjust schedules to match supplies in their area. Trading will once again be pushed towards the end of the week. Expect more activity to begin today.
There is a general movement into commodities. Led by the metals, grain and cattle have joined in the move higher. The U.S. produces lots of commodities sold on world markets and a cheaper dollar makes those products priced more attractively.
Kansas owners sold cattle last week from $233 to mostly $236 while Texas cattle owners sold $235.50 to $236.50. Northern live sellers received from $234-$236 with most dressed sales at $368-$370. Prices were $2-5 higher.
This past week’s slaughter of 535,000 head was down 27,000 from the previous week’s slaughter volume, but 59,000 under last year. Weather caused several shifts in the beef plants to be cancelled along with the Tyson plant closing and the weekly slaughter sharply reduced. Grading of cattle above the choice grade topped all time records. The slaughter is likely to remain near the current range for the coming weeks as packers adjust to a plant closing and new adjusted slaughter rates in the remaining plants.
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 960#, 3# higher than the prior week, and 43# heavier than last year. The carcass weight is 80+ pounds over two years ago. 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 .6% from the previous week at 87.7% — another all time record.
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. Large discounts in the deferred month usually discourages forward contracting.
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 Christmas, the middle meats should provide support for the cutout. USDA Prime cuts are carving out a larger slice of the grocery offerings. Holidays provide an opportunity for many families to spurge on food purchases. Heavy carcasses also are changing the processing specifications for some cuts. Many of the rib cuts are now cutting off the lip to make the ribeye steaks smaller.
The Cutout. Choice boxes moved higher while select were lower. Plants will be balancing input costs from live cattle with beef sales in an effort to restore improving margins.
One casualty of the beef marketing efforts has been the highest end products. The Wagu and branded “all natural” specialty items often seen on the meat counter, but always carrying a heafty price tag. These include the USDA Prime cuts and have become more prevalent as quality grade on all cattle continues to break new records. It is not unusual to see packages carrying a discount sticker. They must be sold like all perishables, but unlike most perishables, the consumer experience eating the discounted cuts is not diminished.
Replacement markets
The feeder market is remaining competitively priced as buyers struggle with limited numbers of cattle and find those offered are in strong hands and considered overpriced. Even the most inexperienced buyers of cattle are worried they are paying too much. Placement numbers recovered somewhat in December but will be trending lower most of this year. Hopes for a positive outcome from ownership of new purchases are not high and most operations want to stay in the market but know they are overpaying for cattle. There is a new desperation driving new purchases of owning inventory at any price.
The dairy segment of the beef industry is in a liquidation mode following drops in cheese, milk, and butter prices. More dairy cows can be expected in this year’s slaughter numbers. Helpful to many dairy operations are the prices of day old beef dairy cross calves that have become a popular feature in marketplace.
Feedyard occupancy levels refilled somewhat in December following Trump’s declaration to hammer beef prices and the brief decline in feeder cattle prices. There will always be a relationship between futures prices, cash prices and placements. Live cattle futures prices somewhat recovered after the Trump assualt enough to cause some operations to begin refilling empty pens. The whispers are getting louder about a port by port opening of the Mexican border to be announced soon, but news of more screwworm cases in Mexico continue.
The drought monitor is showing some areas of stress. Some dryness has developed in the southern plains. Moisture conditions and wild fire possibilities will play into the rebuilding of the nation’s cattle herd. If the plains is blessing with timely spring rains, the increase in cattle numbers will happen sooner rather than later.
CLOSED
CLOSED
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 moved higher. Corn basis levels in Guymon, Oklahoma are at +$.50 — basis the March contract.
PLACEMENTS 2026
Two things are delivered when we receive the monthly placement numbers. One thing we know and the other is unknown. Lower placements are telling us that smaller numbers of fed cattle will be available in the coming months. Even extracting that information from a government report that may not be accurate, the trendline in placements is down and there is little reason to believe more fed cattle will be marketed later this year. What we don’t know about placements is whether this year will be the low point for placements and whether future years will see increases from this low point.
We also know that smaller supplies of fed cattle does not always translate into higher prices. Consumers might back off high beef prices. Trump might have more tricks up his sleeve to bust beef prices. Beef imports might skyrocket while exports will dwindle. There are reasons why price estimates judged by live cattle futures are selling discount to current cash.
Weather always plays a role in cattle cycles, and this year is no different. The speed of rebuilding depends on rangelands being able to handle increasing numbers. Most areas moving into the spring are in relatively good condition. We have yet to finish this winter and the current snow and frigid temperatures might continue.
Replacement prices have risen to the point where many breeders are afraid to increase their herds for fear of a steep market decline on all cattle. As breeder prices have skyrocketed, those high-priced replacement breeder heifers will require current prices for calves to return a decent dividend on their investment. Many ranchers are giving second thoughts to adding to breeder herds at these high prices.
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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
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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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