November 9, 2025
THE MARKETS
The downward drift of futures ended on Friday when futures made a paltry gain following a $30 CWT. crash since October 17. The entire industry will take a weekend to absorb the reaction of the President on Truth Social Friday when he called on the Justice Department to carry forth an investigation of the beef processors. SEE THIS WEEK’S EDITORIAL
Packers took advantage of massive moves in futures to secure next week’s slaughter needs at steady to softer prices. Cattle traded at $232 in Texas and Kansas — $3-4 weaker. Northern cattle owners accepted $360 dressed and $230 live — steady with the previous week. A few cattle in Iowa traded for $228. Many of those northern sales are moving south where numbers are the shortest.
This past week’s slaughter at 555,000 head was down 4,000 from the previous week and 65,000 under last year. Some might look at slaughter volume that is 10% under prior year and realize placements during last spring were not down 10%. The observation might be a sign of backed up cattle in the feedyard, but that is not the case. 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. Box prices were mostly flat for the week meaning this level of slaughter is matching the demand needs from the retailers.
CATTLE FUTURES
Live cattle gained $2-3 to close the week. The daily volatility this past week saw daily trading ranges beyond any ever demonstrated by the cattle contracts. The interplay between live and feeder contracts, fundamentals and emotions, and reason left a gap in rational analysis.
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 948#, par with 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 84.7% . 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 mostly mixed and steady this week meaning the supply of beef is matching the retail needs. 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. Many heavier replacement cattle have followed the futures down, but many of the lighter offerings have stubbornly refused to follow. 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 over 800lbs 10.00 higher in a light test, under 800lbs 25.00 higher. Steer calves 20.00-30.00 higher. Feeder heifers and heifer calves 15.00-25.00 higher. Feeder quality plain to average. Calf quality average with a few fancy drafts. Buyers were aggressively bidding on calves. Corporate buyers were still cautious, today. CME futures opened lower but have closed dollars higher. Sunshine and mid 70s are forecasted for the rest of the week. Supply included: 100% Feeder Cattle (55% Steers, 37% Heifers, 8% Bulls). Feeder cattle supply over 600 lbs was 47%
Compared to last week: Steer and heifer calves 20.00-30.00 higher. Quality ranged from plain, thin condition cattle to attractive type cattle carrying full condition. Spreads were wider than usual as the sale began very strong, but after the board closed dollars lower, buyers started to pull back. Supply included: 100% Feeder Cattle (46% Steers, 40% Heifers, 14% Bulls). Feeder cattle supply over 600 lbs was 21%.
Feeder Cattle Futures. Futures reverse course and added $2-4 to yesterday’s close with the largest gains in the nearby. More interesting was watching the trading ranges of $8-9.
The lack of liquidity in the feeder contract provides a perfect environment for prices to move too far in either direction. Poor liquidity leads to extreme volatility. Overdone directional price movements frequently require corrections and traders sense the vulnerability of the contract that needs to be cash settled but the contract index needs a redo.
Feeder Cattle Cash Index. The index is tracking the moves in cash prices.
Video and Internet Replacement Cattle Auctions. The movement from traditional private treaty sales to Internet auctions has been slow but steady. Producers have chosen this option as the primary marketing tool for most of the cattle offered in the replacement markets. The market that was once dominated by one firm has seen new competition from multiple trade platforms.
National Weekly Feeder Summary released on Friday of each week tracks the national prices by region for last week.
Grain Futures. Corn prices were lower. Harvest is moving to the final stages as hot and dry weather are ideal for bring in the crop. Some disappointment has been evident in crop yields and this has supported strength in the corn market. Elevators are holding the basis flat. Corn basis levels in Guymon, Oklahoma are at +$.60 — basis the December contract.
ANNALS OF IMPROBABLE RESEARCH
President Donald Trump posted on Truth Social calling for an immediate investigation by the Department of Justice into major meat-packing companies. Trump accused the meat packers of illicit collusion, price fixing, and price manipulation. He claimed these companies were artificially inflating beef prices, unfairly blaming American ranchers, and jeopardizing the nation’s food security. Trump stated:
“Action must be taken immediately to protect consumers, combat illegal monopolies and ensure these corporations are not criminally profiting at the expense of the American people.”
Two of the four largest beef processors are publicly traded companies reporting quarterly to the SEC with financial disclosures. Tyson, who will report earnings this coming Monday morning, has estimated losses from the beef processing division could reach $450 million this year. JBS reported a $293 million dollar loss from American beef operations in the second quarter of this year. Cargill and Marfrig (National Beef) do not publicly report earnings, but both have cited financial stress in the beef sector. It is reasonable to assume that independent beef processors are suffering worse financial results than the largest four who control the largest, most efficient plants.
Highlighting and targeting specific foods like eggs, orange juice, coffee or beef for government action to reduce the prices of those products defeats the proper function of a free market. It is the market signal given by the free market that corrects the shortfall. High prices cure high prices.
The national attention given to high beef prices has immediately caused speculative long traders in the futures market to run for the exits. The assault has brought prices in the nearby December live cattle contract down from $248 on the 17th of October to $218 this past week. This translates into $450/head on a 1500# steer. The government has more important priorities than wasting millions of dollars hunting a scapegoat for high beef prices.
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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