September 29, 2026
MARKETS
The daily slaughter volumes tells volumes about the state of the market. Instead of the expected 105 -110,000 head, only 95,000 head were reported meaning workers were still fearful of returning to the plant. The hope was this week would make up for last week’s shortful and instead we may be looking at another week where processors are forced to slow the chain in beef plants because of lack of attendence. Show lists were down in Texas and up in Nebraska and Kansas.
A few cattle sold in Iowa steady at $350 dressed. Last week’s live sales were mainly $220-$223 in the north and $226 in the south. Dressed sales last week ranged from $345-$350.
Diesel prices are one input that goes into all supply chain operations across the nation. It doesn’t matter if the freight is live cattle or dressed beef or the grain necessary for finishing the nation’s cattle herd, the result of skyrocketing diesel is felt throughout the beef chain in adding costs that must be passed along the chain in the form of higher prices.
Heavy rains are falling on much of the dry southern plains and southwest. Arizona, New Mexico, Colorado, Texas and Kansas have received plentiful rains. These rains will contribute to winter grazing if wheat pastures develop moving forward.
This past week’s slaughter volume was a shockingly low 483,000 head — 45,000 under the previous week and one of the lowest non-holiday week slaughters ever. It also fell 75,000 under last year. The threat of immigration arrests caused beef plant workers to stay at home and plant operations can not function without the hard working employees. Profits improved at the nation’s processing plants as they lower cattle cost and raise box prices. Total beef production plummeted with the plant problems. The status for fed supplies will remain tight through year end despite this one week of lapsed volumes at beef plants. Assuming ICE backs off, next week’s slaughter will attempt to make up this week’s shortfall.
Disappointing plant slaughter once again threatens the cash market.
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 954#, 3# higher than the prior week, and 23# 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 .2% from the previous week at 88.0%. 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 opened the week higher as the shortfall from last week’s slaughter number became obvious and this week’s continuation is worrisome to retailers. Some orders were cancelled by processors creating problems with the supply chain. 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
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 scratched or passed out. These cattle may be pulled back into the marketplace with the reversal upward of both fed and feeder prices that will pull calf prices up. 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.
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. Volumes will be slow to develop and crossings are sometimes interrupted with bureaucratic glitches that have always plagued the crossing stations. USDA inspectors are especially watchful for anything out of the ordinary.
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. 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.
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%
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 opened the week lower. Some market moving news is anticipated for the grain markets when Trump-Xi meet. 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.
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“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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