July 29, 2026
MARKETS
Short bought packers entered the week needing a few more cattle for this week. They were able to add a few cattle Monday, with sharply falling futures, at $228 live in Kansas and $360 dressed in Nebraska. That price was unacceptable to cattle owners yesterday and bids of $228 were passed. Futures have always tended to overstate the impact of the border opening and some corrections were posted yesterday. More pressing to humans and animals, and material to the market, is the extreme heat across much of the country.
This past week’s sales were 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.
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.
People forget liquidity in the distant deferred futures contracts is limited. Prices continue to suffer on the deferred contracts.
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 945#, 1# 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 .7% from the previous week at 86.4%. 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 choice box prices were higher as prices seek stability. 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
Extreme heat discourages cattle owners from loading, shipping and selling cattle. Receipts across the country were lower and extra stress caused by cattle movements will tend to delay some marketing plans while other scorched pastures will need to be abandoned. The reaction to a month of hard hits to cash prices for fed cattle is translating into sharply lower prices for replacements. Buyers still believe prices are $100 cwt. too high and the reopening of the border only emphasized the point with sharp declines in live cattle futures a year out. 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 the gap will narrow as we move into 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: All classes lightly tested due to several days of temps over 100 degrees, conditions not conducive to moving cattle. Market as a whole began lower, however as the sale progressed, many sales moved back to steady with last week. Feeder steers steady. Feeder heifers steady to 5.00 lower. Steer and heifer calves steady. Despite a sharp decline in cattle futures at market opening, buyers remained actively engaged and were not allowing futures prices to influence their purchasing decisions. Supply included: 100% Feeder Cattle (57% Steers, 39% Heifers, 3% Bulls). Feeder cattle supply over 600 lbs was 66%
Compared to last week: Steer and heifer calves to lightly test to set a trend but a lower undertone noted. A few drafts of either front-end or thin fleshed cattle sold at steady money. Demand moderate. Limited receipts continue to be the trend due to hot and dry conditions. Estimated receipts for tomorrow’s yearling sale is 1400. Supply included: 100% Feeder Cattle (38% Steers, 47% Heifers, 14% Bulls). Feeder
cattle supply over 600 lbs was 12%
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 recovered some of early week losses. Corn conditions were mixed as the crop enters the silking stage. 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
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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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