October 2, 2026
MARKETS
In the north live prices were established at $221-$222 with southern sales mostly at $226. Dressed prices this week range from $345-$350. The spreads between north and south have widened. This will compel movements between the regions. Slaughter volumes are returning to a more normalized number and that is pressuring the box prices.
The Federal Reserve Bank sets interest rates in an effort to control inflation. Inflation will be difficult to control with the war effort continuing despite some signs of improvement in oil flows. Long term interest rates continue to climb as Data Centers present a inexhaustable demand for funding. Those same monetary policies set by the Fed impact the value of the dollar and therefore control pricing for many of the products we export or import like beef.
This were recovered slaughter volumes to a normalized 548,000 head — 64,000 over the previous week and on par with most recent weeks. It fell 20,000 under last year. The threat of immigration arrests caused beef plant workers to stay at home last week but reassurances of safety from harassment brought them back to work. Processors have maintained profitability since July — the longest period during the past few years. The status for fed supplies will remain tight through year end.
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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#, 2# lower than the prior week, and 12# 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 .7% from the previous week at 87.3. 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 moved sharply down as this week’s slaughter volume is expect to jump from last week’s small number. Slaughter volumes will continue to be dictated by processing margins and government intervention.
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
October and November are the largest marketing periods of the year for replacement cattle. Demand for replacements is high and recent rains across a broad national coverage will create grazing opportunities for new cattle for growing and breeding. Those buyers closely examining the future outcome of today’s purchases based on deferred cattle futures will not find financial rewards at the end of the line.
The movement of cattle, both large and small, from Mexico to the U.S. is becoming more normalized as the second crossing of St. Teresa near El Paso opens. Recent rains have hampered smooth, steady and consistent crossing volumes. Inspection on both sides of the border have been subjected to extra scrutiny as government people work to do their job and prevent new closings. All Mexican cattle are now required to have a RFID tag.
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, has enjoyed generous rains and more is expected. Most fields have been planted and some have an emerged crop. Warm weather will now be important to plant growth and grazing opportunities.
Seasonally health problems can begin for unweaned calves during the fall. Many operators have suffered the penalty paid when they buy fresh weaned calves and experience usually large death loss. Not only can death loss percentages jump, but also sick calves present a constant labor requirement. A $50 cwt. spread between weaned and unweaned calves is large, but sometimes justified. The spreads between weaned and unweaned calves is widening. Some sellers will also attempt to avoid marketing calves through local auction 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.
Compared to last week: Feeder steers mostly steady to 3.00 lower. Feeder heifers unevenly steady. Demand good for feeder cattle. Steer calves 5.00-15.00 lower. Heifer calves 2.00-8.00 lower. Demand moderate for calves. Quality average to attractive, end plain. Most cattle in average flesh conditions, few fleshy. Weigh-ups average to full. Wheat farmers busy sowing wheat or working ground ahead of forecasted rains for this week. Supply included: 100% Feeder Cattle (57% Steers, 38% Heifers, 5% Bulls). Feeder cattle supply over 600 lbs was 65%
Compared to last week: Steer calves over 500lbs 5.00-10.00 lower, under 500lbs unevenly steady. Heifer calves over 500lbs 5.00-10.00 lower, under 500lbs 15.00-20.00 lower. Quality was noticeably lower this week compared to last week, which contributed to the softer market. With many farmers occupied in the fields and rain forecasted across the trading area, buyer interest was limited. With roughly one-third of the cattle remaining, several buyers left, reducing competition and weakening demand through the remainder of the sale. Today’s supply included 69% un-weaned cattle. Supply included: 100% Feeder Cattle (39% Steers, 46% Heifers, 15% Bulls). Feeder cattle supply over 600 lbs was 28%
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. USDA increased the ending stocks for corn corn prices have adjusted to the new balance sheet number. The market has been weakening for several days making a case for some leaks of the report. The current basis level is near +$1.00 in Guymon, Oklahoma — basis the December contract.
ICEing on the Cake
As the Trump administration’s two-year anniversary and the midterms approach, the President undermined his goal of lowering beef prices. ICE paper audits and a visible presence at several Kansas beef plants produced predictable results: workers who feared arrest or harassment stayed home, leaving the plants unable to operate.
History repeatedly shows that government interference in free markets often produces unintended consequences. Despite ample evidence that such intervention is inadvisable, the same mistake continues to recur. The application of the smallest amount of common sense to predict the outcome of the ICE actions would in most instances have halted the initiative.
Now the entire beef production pipeline is left to repair the damage. The job is made more difficult by the failure of USDA to even provide the tools for the industry to discover the price fall out from the ICE actions. Three out of five of the major price reporting regions are not being reported. Producers are mostly in the dark about damage to pricing. Producers are now being told it will take over a year to redraw rules and regulations to provide price reporting.
The dilemma before the American public for the midterms is a large one. Choosing between capitalism and socialism is critical to the future of our country. President Trump who should be championing capitalism and free markets is instead giving capitalism a bad name as he attempts to micromanage the economy.
CARDINAL RULE FOR COMMODITY TRADING
“IF IT IS OBVIOUS, IT HAS GOT TO BE WRONG!”
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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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