July 26, 2026
MARKETS
Friday was a big news day. The mid year Cattle Inventory and COF reports were issued. USDA announced a reopening of the border. Friday also marked an uptick in cash prices — the first in over a month. Cattle owners were unwilling to release more sales at $230, resulting in packers increasing bids to $231 where a few traded before the COF report. In a preview of next week, packers were active Saturday with $231 bids and no takers. This past week’s sales have been mainly $230 with a few up to $232 and mostly $365 dressed. Live prices were mainly $7-8 lower and dressed $10-15 lower. Each week, Kansas is selling more cattle using a negotiated base price on a grid. Many times the negotiated base price is different from other cash prices. Kansas sold earlier in the week on a grid with a negotiated base price of $233.
BORDER TO REOPEN
USDA issued a statement on July 24, 2026, announcing a phased reopening of the U.S.–Mexico border for cattle imports beginning August 24, 2026, provided Mexico continues to meet the requirements of a Joint Action Plan aimed at controlling the New World screwworm (NWS) outbreak.
The first port to reopen will be Douglas, Arizona on August 24, 2026. USDA will then begin operational steps for later reopening of Santa Teresa, New Mexico, and Columbus, New Mexico. Every animal entering the United States through these ports will receive a full USDA inspection to ensure it shows no signs of New World screwworm. USDA identified Sonora and Chihuahua as the lowest-risk Mexican states because of their stronger animal-health and inspection programs.
July 1 Cattle Inventory
All cattle and calves in the United States on July 1, 2026 totaled 94.2 million head, slightly above the 94.0 million head on July 1, 2025.
All cows and heifers that have calved totaled 38.1 million head, unchanged from the 38.1 million head on July 1, 2025.
Beef cows, at 28.5 million head, are down 1 percent from a year ago. Milk cows, at 9.65 million head, are up 2 percent from previous year.
All heifers 500 pounds and over on July 1, 2026 totaled 14.7 million head, 1 percent above the 14.6 million head on July 1, 2025. Beef replacement heifers, at 3.80 million head, are up 3 percent from a year ago. Milk replacement heifers, at 3.60 million head, are up 3 percent from previous year. Other heifers, at 7.30 million head, are 1 percent below a year earlier.
Steers 500 pounds and over on July 1, 2026 totaled 13.9 million head, up 1 percent from July 1, 2025.
Bulls 500 pounds and over on July 1, 2026 totaled 1.90 million head, unchanged from previous year.
Calves under 500 pounds on July 1, 2026 totaled 25.6 million head, unchanged from a year earlier.
FEEDLOT
Cattle and calves on feed for the slaughter market in the United States for all feedlots totaled 13.2 million head on July 1, 2026, up 2 percent from previous year. Cattle on feed in feedlots with capacity of 1,000 or more head accounted for 86.1 percent of the total cattle on feed on July 1, 2026, up 1 percent from previous year. The total of calves under 500 pounds and other heifers and steers over 500 pounds (outside of feedlots), at 33.6 million head, is down 1 percent from the 33.8 million head on July 1, 2025.
Calf Crop Down 2 Percent
The 2026 calf crop in the United States is expected to be 32.5 million head, down 2 percent from last year. Calves born during the first half of 2026 are estimated at 23.9 million head, down 2 percent from the first half of 2025. An additional 8.60 million calves are expected to be born during the second half of 2026.
July 1, 2026 CATTLE ON FEED
On Feed July 1…………..102.2%
Placed during June ……97.1%
Marketed during June 97.3%
This past week’s slaughter was an estimated 528,000 head — 3,000 over the previous week. The slaughter volume was 26,000 under last year. Box prices remained below 2025 levels and lost $6 on the choice boxes last week. With each week, packers improve their position as box prices fall less than cash prices for fed cattle. The status for fed supplies will remain tight, but many sellers are demoralized and futures have provided ammunition to the negative mind set of sellers.
Traders will weigh news released late Friday and express their views when the markets open on Monday.
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#, 7# lower than the prior week, and 30# 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 .6% from the previous week at 87.1%. The quality grade has begun a slow decline but with out weights at record highs, grading will remain high historically.
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.
Beef demand will now focus on summer consumption and price issues. The heat in summer is never good for beef consumption. High price of beef is always a risk for damage to demand and the continuing interest of the administration to lower beef prices is a constant threat. 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. The box prices were lower. The beef complex is undergoing some complex pricing changes as imports begin to weigh on the grind prices and hamburger meat works lower. Box prices have now declined under prior year. Slaughter volumes will continue to be dictated by processing margins.
Replacement markets
The reaction to three weeks of hard hits to cash prices for fed cattle began to affect the yearling cattle with drops of $20 cwt. to $40 cwt. reported in some areas. Buyers still believe prices are $100 cwt. too high and the reopening of the border may continue pressure on the replacement prices. Internet and video auctions reported large volumes of offering lots that were passed out. P.O.ing is becoming a popular choice among sellers who hope the market will rebound.
The heat will continue to exert pressure on summer pastures and those cattle forced off pasture will find it difficult to connect to interested buyers. Video and internet auctions will recycle the P.O.ed cattle and aggregate more offerings including some who hope to grab current prices for fall deliveries. Many will find bids on fall deliveries to be substantially under current prices. Despite the sharply lower current auction prices for cattle, the index for feeder cattle remains well above cash prices but it will change during August. The record breaking prices of three weeks ago are still fresh in the mind of sellers.
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 and heifers 15.00-25.00 lower. Steer and heifer calves 20.00-30.00 lower with spots up to 40.00 lower. Demand moderate. Quality plain to average, weaned cattle coming off grass was in the buyer’s favor today. Hot and dry conditions continue to reduce receipts, with triple-digit temperatures expected over the next 10 days. CME futures are trading sharply higher today but did little
to help the cash market. Supply included: 100% Feeder Cattle (55% Steers, 40% Heifers, 5% Bulls). Feeder cattle supply over 600 lbs was 62%
Compared to last week: Feeder steers 5.00-15.00 lower, instance to 20.00 lower. Feeder heifers 3.00-10.00 lower. Demand moderate to good for feeder cattle despite cattle futures once again trading sharply lower. Steer quality average, end attractive. Heifer quality plain to average. Feeder cattle in medium to fleshy conditions. Several summer type feeding cattle available. Steer and heifer calves 15.00-25.00
lower. Calf quality average. Demand moderate. The dog days of summer are here and producers are more focused on baling hay rather than buying cattle. Tuesday’s supply included 51% un-weaned cattle. Supply included: 100% Feeder Cattle (54% Steers, 41% Heifers, 4% Bulls). Feeder cattle supply over 600 lbs was 74%
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 this week in response to war news. USDA pegged corn acres at 95 million acres. Corn basis levels in Guymon, Oklahoma are at +$1.10 — basis the September contract.
THE INVENTORIES OF CATTLE
The release of the mid year cattle inventory did not carry the weight of importance that a national cattle inventory deserves. Last year the mid year report was not released because the effort to gather the data was not deemed sufficient to justify the report. This report should deserve little stature because of flaws in the collection of data for the report. Mail out surveys to producers are largely ignored. The low volume of cow slaughter this year should indicate larger numbers of cows from reduced culling, but the report does not reflect this analysis. Two percent fewer calves is not realistic and how those numbers are gathered and reported is questionable.
The monthly COF report was on target with pre-release estimates. It reflects the reality of continuing short supplies of fed cattle through year end. Probably more meaningful to the marketplace is how cattle owners will choose to feed and market cattle placements in the future. One should not expect 2027 to reflect another year with marketing weights 30-40# pounds over this year. Will the swap price for replacement cattle encourage cattle owners to market cattle timelier by reducing the current surfeit of YG 4&5s? Will the COF numbers move deferred futures to a premium in the upcoming year rather than maintain the current discounted prices. At some point lower beef prices should begin to stimulate demand.
The possibility of Border Reopening has caused many a nosedive in futures prices – generally overstating the importance of our dependence on Mexican cattle. Insiders recognize the border reopening will not result in a surge of Mexican cattle into the United States. Mexico has quietly been restructuring its own cattle feeding business and feedlot inventories have moved higher in Mexico meaning many of those cattle will be harvested in Mexico and move to the U.S. in carcass form. Moreover, recent rains across Sonora and Chihuahua have created useful homes for cattle to graze until late fall when most cattle cross the border.
Bottom line the implication of all the breaking news for the markets is murky. Hot weather is never a friend for beef consumption. However, coming out of the summer doldrums for consumption is a usual seasonal pattern expected by some this year and acknowledged by futures prices that are not largely disconnected from current cash prices. Political considerations cannot be lightly dismissed and war developments and administration pressures on food prices will continue.
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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