September 19, 2026
MARKETS
Sales were reported in the north at $222-$223 live and $350-$355 dressed. These prices were steady with last week despite crashing futures prices. Processors will attempt to hold positive margins by managing the slaughter volumes each week and balancing box prices against spot cash prices for cattle. In the south trading began on Saturday when $225 bids were refused, some cattle traded at $226.
Because of the failure of USDA price reporting, confirming sales is impossible. Buyers and sellers are struggling to develop accurate prices for transactions in Texas, Kansas, and Colorado. The spreads between North and South are widening because packers can pay more in the south and know they can not be confirmed.
USDA COF REPORT
September 1 COF Report:
On feed: 100.7% (trade estimate 101.8%)
Placed: 90.8% (est. 97.3%)
Marketed: 96.7% (est. 96.2%)
Placements fell significantly under pre-release estimates.
This past week’s slaughter volumne was an estimated 529,000 head — 24,000 over the previous week and 30,000 under last year. This past week the slaughter volume fell short of most estimates and will help stabilize box prices. Profits continue in the nation’s processing plants as they have been able to hold input costs at bay aided by falling futures prices. Total beef production for the week remains under last year. The status for fed supplies will remain tight through year end leaving the processors to struggle with improving leverage from the cattle owners.
The monthly COF report featured the second of two months in a row of the smallest feedlot placements since the report began. The surprise was not the low placement number but the fact the report did not get out before the release and futures did not jump higher on Friday.
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 952#, 3# higher than the prior week, and 20# 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 .9% from the previous week at 87.8%. The quality grade remains near historic highs as cattle are fed to heavier weights.
The Weekly Steer and Heifer Grading Report reflects regional supplies of choice and prime cattle and often is determinative of regional differences in live prices. The report also indicates the current status of fed cattle offerings in each area.
Forward Cattle Contracts: Forward contracts are always a portion of the inventories the processors maintain for slaughter. Offered 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 movement of futures prices, either up or down, will relate to the number of forward 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.
Retailers will be looking to fall plans for marketing beef. Improved demand should be expected as summer temperatures segue into milder fall temperatures. Box prices remain well under prior year. With the grind dominating beef sales, imports will continue to rise and those lean cuts will be blended with excess fat from the beef plants.
USDA Prime cuts are carving out a larger slice of the grocery offerings. Many retailers are struggling to market these cuts and often feature discounts to encourage consumption. This is a benefit for consumers who can find bargains on premium cuts. 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. Box prices are trading sideways. Slaughter volumes will continue to be dictated by processing margins.
It is important to remember that spot box prices are much like spot cash prices for live cattle. Most boxes are sold under formulas and do not always have the same fluctuations as the spot market.
Replacement markets
Finally summer heat is transitioning into fall’s more moderate temperatures. The next two months are the largest marketing periods of the year for replacement cattle. Late summer/fall video auctions are showing many pens of cattle passed out. These cattle will reappear on future auctions and will find a home at some point and at some unknown price. Those cattle owners opting to market through livestock auctions, know the cattle will sell, but they have no control over the price. Many of the replacement cattle moving to market are returning losses to the owners.
Weather will always influence the market for replacement cattle. The main grain belt in the southern plains, where many cattle are grazed on winter wheat, are expecting rain this coming week. Planting grain fields requires rain to plant and give plants a chance to grow. Operators are hesitant about acquiring an inventory of cattle for winter grazing until they are confident in the existence of a viable forage for grazing.
Seasonally health problems begin for unweaned calves. A $50 cwt. spread between weaned and unweaned calves is large. Buyers are wary of stress caused by heat and weaning and many will avoid high risk purchases. The spreads between weaned and unweaned calves is widening. Some sellers will also attempt to avoid marketing calves through local sales to eliminate extra movement and costs.
The Drought Monitor is a map showing regions of the country under stress for lack of normal rainfall. The map is compiled over a week and updated every Thursday with data collected through Tuesday of that week.
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 lower at week’s end. The corn basis has softened. The current basis level is near +$1.00 in Guymon, Oklahoma — basis the December contract.
THE REPLACEMENT MARKET
Those operating in the live cattle sector of the beef chain must always replenish the supply to keep the chain useful to a beef-loving audience. This downward cycle, and now rebuilding, of the nation’s beef cattle herd has made the job of those in the replacement markets much more difficult than past cycles causing increased risks associated with rebuilding.
Government actions attempting to manipulate free markets have left many operations with losses on each group of cattle sold in the marketplace. While the fundamentals remain strong, the uncertainty and disappointment leave an operating climate of volatility and pessimism. PR efforts to assuage the apprehension in the industry are falling on deaf ears.
Marketing results across the many video auction sites, during the largest marketing months of the year, are a case in study for the problems facing the industry. Both buyers and sellers are unhappy with the results accompanying the sale of each group of cattle. Sellers are seeing red ink with each sale failing to return their investment much less the interest cost necessary to bring the animals to the end point. This is causing large numbers of scratches on catalogue offerings (last minute cancelations) and another large number of POed sales where sellers refuse the price they believe is too low.
Buyers, both for growing and finishing cattle, are also unhappy with their purchases. It is hard to get excited when the market is telling you a $2-300/head loss is awaiting you at the end of the line. The cost of doing business is rising on all fronts – fuel is higher, interest rates headed up, feed prices higher and the people helping adding pounds to the cattle need a raise.
The uptake from this operating environment is one of frustration and confusion. The players are living from one unexpected announcement to the next with little confidence in the outcome of each decision necessary to finish their endeavors. Hope and confidence in the future are necessary components for any thriving business – something totally lacking today.
CARDINAL RULE FOR COMMODITY TRADING
“IF IT IS OBVIOUS, IT HAS GOT TO BE WRONG!”
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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