December 6, 2025
THE MARKETS
Live sales in the north occurred at $220-$222 Thursday followed by $225 Friday. Dressed sales were at $340 turning to $345 — both prices $10-15 higher than last week. Light sales in Texas went unreported by LMR and there were no reports of sales in Kansas. This leaves two of the largest regions in the country without a reported market. This means half of the weekly slaughter has no foundation for pricing.
The sad lack of relevance for Mandatory Price Reporting is the subject of this week’s editorial at the bottom of this page.
Quality grading this year has remained well above last year [3-4%] and previous histories. The most obvious reason is the increasing out weights and days on feed, but also included in the mix is the increasing population of dairy/beef cross cattle that are very consistent on super high quality grade with many pens reporting only a few select grades. The USDA select category is becoming less important than the USDA prime grade and daily price reporting should begin featuring the choice/prime spread. Texas as a region, has jumped sharply higher in grading as packers pull cattle from the north.
The ramped up slaughter of this week was a quick response to hefty margins at the beef plants. This past week’s slaughter at 600,000 head was up 102,000 from the previous week and only 14,000 under last year. This is the largest slaughter volume in months and will likely be repeated next week followed by two holiday shortened weeks. Packer margins dwindled this week as input cost jumped higher and box prices softened.
CATTLE FUTURES
Futures jumped $5 in the expiring December contract. Recent gains have been concentrated in the front end of the contracts with the deferred contracts lagging. Hedged sellers suffered basis levels this week. The erratic behavior of futures prices has keep risk managers at the several firms using futures on a daily basis at jeoprady. Modeling current yearling placement cost against next year’s futures in a big time loser.
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 an all time record weight, and 41# 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 1.2% from the previous week at 86.4% .
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 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.
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 softer as retailers anticipate a ramped up slaughter. The supply of beef is being carefully managed by the processors. Because of improved quality grade, more prime cuts will be on the shelf this holiday season.
Replacement markets
Feeder futures have made a large adjustment downward in price, but now the shortage of replacement cattle and the demand for a short supply is causing the cash prices to resist downward pressure. Buyers are evaluating the future marketing periods for the lighter cattle and deciding if the markets continue downward for yearlings and fed cattle, the lighter cattle have the potential for large losses. On the fundamental side, smaller supplies of replacement cattle translates into intense competition and overpricing at all replacement levels. 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’s light test: Feeder steers 8.00-15.00 higher. Feeder heifers 15.00-25.00 higher. Steer and heifer calves 20.00-30.00 higher, instance to 40.00 higher. Demand good following a pre and post Thanksgving move higher in the cattle complex at the CME. Though futures continue to trade some lower today, demand is good for all classes. Icy start to the day with light freezing rain and drizzle overnight causing major traffic problems this morning. Temperatures to remain in the 30’s today. Quality average to attractive. Supply includes several cattle in a Special Angus sale. These cattle are at least 60 days weaned with multiple rounds of shots, are Angus verified and some BQA (Beef Quality Assurance) as well. These cattle are marked as Value Added in the report. Several nice strings of cattle today. Supply
included: 100% Feeder Cattle (63% Steers, 0% Dairy Steers, 35% Heifers, 1% Bulls). Feeder cattle supply over 600 lbs was 55%
Compared to last sale two weeks ago: Steer and heifer calves 5.00-15.00 higher with spots up to 30.00 higher. Demand very good. Quality mostly average. Weaned calves had average to full condition. CME feeder futures limited up during the trading session before closing just under the limit, today. Supply included: 100% Feeder Cattle (36% Steers, 54% Heifers, 10% Bulls). Feeder cattle supply over 600 lbs was 19%.
Feeder Cattle Futures. Futures prices posted additional gains of $2-3 to close the week.
The lack of liquidity in the feeder contract provides a perfect environment for prices to move too far in either direction. Poor liquidity leads to extreme volatility. Overdone directional price movements frequently require corrections and traders sense the vulnerability of the contract that needs to be cash settled but the contract index needs a redo.
Feeder Cattle Cash Index. The index is tracking the moves in cash prices.
Video and Internet Replacement Cattle Auctions. The movement from traditional private treaty sales to Internet auctions has been slow but steady. Producers have chosen this option as the primary marketing tool for most of the cattle offered in the replacement markets. The market that was once dominated by one firm has seen new competition from multiple trade platforms.
National Weekly Feeder Summary released on Friday of each week tracks the national prices by region for last week.
Grain Futures. Corn prices drifted lower at week’s end. Elevators are moving basis quotes to the March contract. Corn basis levels in Guymon, Oklahoma are at +$.50 — basis the March contract.
THE USELESSNESS OF MANDATORY PRICE REPORTING
The intent of the Mandatory Price Reporting law was simple and clear. It is designed to provide beef producers, packers and the industry with a daily, weekly, and monthly recap of prices for cattle at various stages of the marketing chain. The law, passed by Congress, promised transparency and timely reporting so all producers could make informed marketing decisions. The law assigned to government bureaucrats the task of drafting the regulations to deliver the intent of the law.
The basic reporting requirements have changed little in the 25 years since USDA began reporting. The packers are compelled to report all transactions within 30 minutes to include price, volume, location, and type of purchase — such as live, FOB, dressed, formula or grid. The regulations protected packers in certain regions from reporting because to do so would compromise confidential information. USDA drafted a ridiculous rule providing protection if one of the following occurred:
- At least three reporting entities need to provide data at least 50 percent of the time over the most recent 60 day time period.
- No single reporting entity may provide more than 70 percent of the data for a report over the most recent 60 day time period.
- No single reporting entity may be the sole reporting entity for an individual report more than 20 percent of the time over the most recent 60 day time period.
The result is no reporting today in Colorado or Texas.
The failure of USDA bureaucrats to change with the times has rendered the reports almost meaningless. The only changes have been the excuses for not changing. The few changes, over the 25 years, have been additions to the reporting and some of those are well intended, but today MPR needs to undergo a complete makeover. The complaints about proper reporting have always been answered by blaming inadequate funding, lack of Congressional direction, mixed opinions coming from industry sources and/or lack of programming staff. These are all subterfuges, deployed to duck the realities of today’s marketplace. Today, using proper database management, and AI, the entire reporting could be revised in one week’s time.
Critical to a newly designed and effective reporting should be the following:
- All transactions deliverable within two weeks should be reported as spot cash prices and should be converted to FOB live prices at the feedyards. Standard freight rates could easily be applied using GPS coordinates for the source and destination of the transaction (feedyard and beef plant)
- All spot transactions should be divided into the following types.
- Cash FOB
- Cash delivered
- Grid FOB
- Grid delivered with the final price reported one week late with the carcass yield and freight adjustments applied to the live FOB feedyard price.
- Formula with the base price for the formula reported on the Monday following the trade week, and the final live FOB prices delayed one week following the application of carcass premiums and discounts.
- “Over the tops” reported in the Monday wrap up following the trade week.
- All forward contracts should be reported according to the following types:
- Fixed — Cash FOB with the delivery period.
- Basis for both formula and cash with the basis month, basis level, and delivery terms.
- The region in which the transaction occurred.
- Reporting regions:
- Nebraska and South Dakota
- Kansas
- Texas
- Northwest – Idaho, Washington, Oregon
- West – California and Arizona
- Midwest – Iowa, Minnesota, Michigan, Illinois
mpr.lpgmn@usda.gov
This email address is used for comments for Livestock Mandatory Price Reporting (LMPR) and the Cattle Contract Library. You can also leave a voicemail at 202-720-1990 if needed. Make sure to have your establishment number available when reaching out. [mpr.ams.usda.gov]
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.
Contact Us
The CATTLE REPORT will strive to answer all emails. Our editorial views are not always popular and sometime create controversy and are sometimes flat out wrong.