October 15, 2025
THE MARKETS
The fed cattle trade will likely be late week once again. Show lists are smaller in all regions, but only modestly smaller. The beef plants are struggling to establish, much less maintain, operating margins. Should the weekly slaughter volumes remain in the 540,000 to 550,000 level, the cutout should improve moving towards the holiday period. Maintaining the proper balance between fed supplies, boxed beef supplies and consumer demand is always a challenge and seasonal differences are always in play.
Asking prices are $240 and higher. The large increases in futures prices have drawn delivery notices in the October contract. Packers are expecting higher input prices this week.
The incremental price changes found in many reports always require some conditioning of the mind. The proper adjustment would be to think in terms of percentage decline or advance instead of dollars per hundredweight. Years of rote conditioning make that difficult. A five dollar advance in fed prices or a $10 advance in replacement cost tends to shock, but the reaction is emotional rather than rational. Oklahoma City market’s roundup included a price change of $40 cwt. higher on heifers Monday.
This past week’s slaughter at 549,000 head was down 13,000 from the previous week and 36,000 under last year. More complete beef production is not available due to the shutdown where aggregate data is missing. Slaughter volumes are expected decline into year end due to limited supplies and plant workovers. The choice cutout has now declined from $415 to $365 and some believe prices will now move higher into the holidays.
CATTLE FUTURES
Futures prices continued higher. Hedged cattle owners are suffering basis problems acknowledged by tendering delivery notices on some cattle.
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 944#, 8# over the prior week, and 27# 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 down .1 from the previous week at 83.2% .
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.
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.
Beef demand is coming mostly from the grind that represents almost half of all beef sold. Published reports show hamburger to be not only the most popular item on the meat counter but also the fastest growing. The increases in beef prices force the retail outlets to change marketing schemes and the best option is the grind allowing all consumers to maintain beef in the diet.
The Cutout. Box prices were barely higher at mid week. The time may have come for cutout reports to deliver equal attention to the choice/prime spread. Select and prime occupy the same volumetric space in beef sales today.
Replacement markets
The fall runs are in full swing. This year’s full swing is tempered by reduced numbers of cattle and auction receipts. Winter grazing prospects are mixed with some areas of Texas and Oklahoma needing additional rains for wheat field grazing. Wheat planting is mostly complete but not all fields are up.
Throughout the industry the feeling that replacement prices have reached a level presenting a imminent danger to operating margins. Comparisons to last year show material price gains on all classes of cattle. Calves in the southern plains have moved from $325 cwt. a year ago to $500 this year basis a 450# calf. Purchases made each week move the burden of a breakeven higher up the price scale. The higher the breakeven the riskier the venture. Cattle purchased on today’s replacement market will require a market at least as high as the market we have today.
As summer cattle move off pasture to the feedlots, one change from last year is noteworthy. Cattle are heavier. In weight into the nation’s feedyards are 25# heavier than last year lending support to the improvement in grazing performance this past summer. Daily gains are trending .25 to .50# over last year with some daily gains reaching over 2#.
The drought monitor continues to favor herd expansion. Some dryness is developing 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 10.00-20.00 higher. Feeder heifers 5.00-15.00 higher. Steer and heifer calves 20.00-30.00 higher, heifer calves up to 40.00 higher. Demand extremly good for all classes including weaned or un-weaned calves. Cattle futures continue to make strong gains. The October Feeder contract has jumped just over 21.00 since the low on October 2nd. Something for everyone today with quality plain thru attractive. Very light rain showers moving thru the state bringing some cooler temperatures, but not enough moisture to bust the drought. Supply included: 100% Feeder Cattle (63% Steers, 34% Heifers, 3% Bulls). Feeder cattle supply over 600 lbs was 64%.
Compared to last week: Steer calves 10.00-20.00 higher with spots up to 30.00 higher. Heifer calves 15.00-25.00 higher with spots up to 40.00 higher. Quality average. Demand very good. CME cattle futures continue their upward swing. The weather is hot and dry for October but a cool-front passes through this weekend. Supply included: 100% Feeder Cattle (47% Steers, 42% Heifers, 11% Bulls). Feeder cattle
supply over 600 lbs was 22%.
Feeder Cattle Futures. The move higher has been steady and unrelenting. Springtime contracts moved higher as some recognize shortfalls of replacement cattle next year.
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 moved higher. USDA crop reports are missing as the government shut down continues. The shutdown also deprives farmers of moving harvest crops into storage with government loans. Elevators are firming the basis as harvest progresses in the plains. Corn basis levels in Guymon, Oklahoma are at +$.60 — basis the December contract.
SEX AND DIET
Iron is a vital component of a protein in red blood cells and hemoglobin, which helps carry oxygen to every part of the body. Minerals are also essential for various other cellular functions, including energy production and maintenance of healthy skin, hair, and muscle generation. Iron deficiency in many women of reproductive age leads to lightheadedness and shortness of breath, and iron deficient women can struggle with anxiety, depression, and lethargy. The number of women suffering from iron deficiency is on the rise and considered by some to be a health crisis.
Women eat about half as much beef as men. They seem to buy into the argument that reducing beef consumption benefits the planet. They refuse to acknowledge the flaws in dietary studies that lump processed meats in with fresh meats and the obvious weakness of assuming study participants tell the truth about what they eat or can even remember. Most negative studies on beef and health rely on observational studies rather than controlled studies where each meal is documented as it occurs like in a retirement home.
Recent trending dietary recommendations suggest increasing daily protein intake from 50 grams per day up to 75 grams. Plant based proteins do not provide the complete amino acid profile necessary for good health. Beef with the natural iron content provides the perfect target for food choices. While demand for all meat proteins is robust, beef demand has held strong despite price pressures at the grocery store and in the restaurants.
Beef producers should always remember beef demand is not totally inelastic. It is the preferred meat but like most products it has price limits for most people. Solid research can always add a boost to demand as consumers become aware of its inherent health value and find anti-beef campaigns debunked.
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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