February 14, 2026
MARKETS
In the north, the completed trade won’t be available until Monday morning. Some light live trade occurred in the north at $245-6 — $1-$2 higher. Some dressed trade was reported at $378 to $382 — $1 to $4 higher. In the south, prices rose to $246-$249. Texas sales were mainly at $248 with many more sales unreported by USDA because they were bought at $1-3 “over the tops”. Kansas sales were mainly $248-$249 with some over the tops.
This past week’s slaughter of 541,000 head was up 6,000 from the previous week’s slaughter volume, but 21,000 under last year. The processors are struggling with large negative margins and recent prices at the feedlot level are producing the first losses in a long time in the feeding sector. The timing of feedlot purchases is determinative of the final outcome and some of last year’s purchases carried high in costs and today’s cash prices are inadequate to return a margin. A most harmful market outcome is a market where both processors and cattle feeders are posting losses. The slaughter is likely to remain near the current range for the coming weeks as packers adjust to the plant closing and new adjusted slaughter rates in the remaining plants.
Packers waited until futures were closed before pushing the buy in the cash market. Afternoon cash sales prices on Friday were $2-5 higher. Hedged cattle owners will wish they had covered futures 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 32# 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 88.5%.
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 overheated replacement market will slow the forward contracting of purchases this year. The discounted price in the deferred futures contracts will not encourage cattle owners to forward price cattle at a loss. Favorable forward basis levels can always incentivize sellers to enter into basis contracts to be priced later.
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.
The northeast is a major population center of this country. One of the coldest winters in history has changed beef consumption patterns for this area and features of roasts and hamburger have grown popular as people stay in and cook. If beef demand should improve heading towards spring, the middle meats should provide support for the cutout.
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 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 stablized but failed to respond to the processors need to advance prices. Obviously some shuffling in the supply chain has been necessary with the Tyson plant closing. Most of the beef plants are located in the center of the country so very little logistical harm is caused by the plant closing.
One casualty of the beef marketing efforts has been the highest end products. The Wagu and branded “all natural” specialty items often seen on the meat counter, but always carrying a hefty price tag. These include the USDA Prime cuts and have become more prevalent as quality grade on all cattle continues to break new records. It is not unusual to see packages carrying a discount sticker. They must be sold like all perishables, but unlike most perishables, the consumer experience eating the discounted cuts is not diminished.
Replacement markets
The feeder market is remaining competitively priced as buyers struggle with limited numbers of cattle and find those offered are in strong hands and considered overpriced. Even the most inexperienced buyers of cattle are worried they are paying too much. Placement numbers recovered somewhat in December but will be trending lower most of this year. Hopes for a positive outcome from ownership of new purchases are not high and most operations want to stay in the market but know they are overpaying for cattle. There is a new desperation driving new purchases of owning inventory at any price.
The dairy segment of the beef industry is in a liquidation mode following drops in cheese, milk, and butter prices. More dairy cows can be expected in this year’s slaughter numbers. Helpful to many dairy operations are the prices of day old beef dairy cross calves that have become a popular feature in marketplace.
The drought monitor is showing some areas of stress. The Texas Panhandle has been a small local spot failing rain or snow this winter. Moisture conditions and wild fire possibilities will play into the rebuilding of the nation’s cattle herd. If the plains is blessed with timely spring rains, the increase in cattle numbers will happen sooner rather than later.
Compared to last week’s light test: Feeder steers mostly steady to 5.00 higher, most increase on 700-800 lbs. Feeder heifers 5.00-15.00 higher. Stockers cattle of suitable kind or condition for grass as well as steer and heifer calves sold 15.00-25.00 higher. Demand very good for all classes. Quality average to attractive. Slaughter cattle trade moved higher last week as numbers of market ready cattle remain limited.
Temperatures back to more spring like. Warm sunshine after the snow is helping those grazing pastures. However, much of the state is still in some stage of a drought. Rain is in the forecast for later in the week. Supply included: 100% Feeder Cattle (67% Steers, 32% Heifers, 1% Bulls). Feeder cattle supply over 600 lbs was 73%
Compared to last week: Steer and heifer calves 10.00-20.00 higher. Quality mostly plain with a few drafts of thin fleshed front-end cattle. Demand very good. Several buyers left early after finding their dollars didn’t go as far as expected, with prices continuing to climb. Some buyers voiced concern that this may be the final big sale for the next several weeks, leading to the increased competition. For Wednesday’s
yearling sale estimated receipts are 7000. Supply included: 100% Feeder Cattle (45% Steers, 45% Heifers, 10% Bulls). Feeder cattle supply over 600 lbs was 20%
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. Analysts will begin to estimate the number of acres for this year’s corn crop. Most expect a small decline as crops rotate from last year’s increases in corn acreage. Corn basis levels in Guymon, Oklahoma are at +$.50 — basis the March contract.
THE ARRIVAL OF THE ARTIFICIAL INTELLIGENCE TSUNAMI
No technology during this and the last century will prove more transformative than artificial intelligence. Since its introduction two years ago, the development has been Mach 10 speed and its ability to change society and industry in months and not years will be felt by all of us. An AI bot now is available to us whether in a search engine or specialized apps for computer code, image generation, or other specific uses. AI IS A BIG DEAL
The first to feel the repercussions of the technology will be the professional class – the doctors, lawyers, accountants, architects, and consultants. Ask your AI bot to draft a contract, create a tax return, read a MRI scan, or draw a Spanish colonial house. You get the drift.
In the ag space, changes will occur in how price discovery occurs and how buyers and sellers connect to each other to find best price. Trading platforms on the web will find and match best prices as well as settle and clear the financial side electronically without counterparty risk. The back office paperwork will disappear.
The supply chain for beef will be redone. AI will control the genetics of the animals delivered through the pipeline. Cattle movements and sorting will become individualized according to weight and genetics. Supersized animals will be processed on site using robot disassembly of the carcasses and supermarkets will be provided with a portion ready cut. Consumers will find targeted choices on the counter whose consistent taste can be replicated every time they buy a cut.
Skill sets and education pathways will become problematic. The value of a college education costing $50-$75,000 a year will be forced to lead somewhere not nowhere. Hands on training will take a new turn. Transportation will all be autonomous. Charting your own pathway through the changes will be difficult and frustrating. AI is not replacing a single skill. It is a general substitute for cognitive work. Probably the safest of all the jobs will be the mental health professionals who counsel humans sinking in the quagmire of AI.
USDA CONTACT FOR CORRECTING MANDATORY PRICE REPORTING
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CATTLE REPORT LIBRARY
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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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