October 24, 2026
MARKETS
A bullish COF report put the brakes on the cash trade following a week when no cattle had traded until Friday. On Friday only light and limited trades occurred mostly in Texas where a few cattle traded at $230. Kansas cattle owners passed $230 as did most northern sellers to $228 bids.
For the second month in a row, sharply smaller placements surprised the market assuring short supplies of cattle well into next year. The report will impact futures as well as current cash prices as packers will deal with the spot prices for next week this afternoon.
USDA COF REPORT FOR OCTOBER 1
On-feed October 1…………….99.6%
Placed in September……… 87.9%
Market in September ………93.4%
Secretary Rollins took the initiative to correct the broken and outdated rules and regulations governing Mandatory Price Reporting for USDA. Beginning with the afternoon reports published on Monday, October 26, 2026, AMS will use data already collected through the LMR system to create an additional cash cattle regional report aggregating data from Colorado, Texas, New Mexico, Oklahoma, and Kansas. This does not require any additional reporting from covered packers.
This week slaughter volumes was 546,000 head — 7,000 under the previous week and only 27,000 under last year. The weekly slaughter continues to reflect improving plant utilitization which translates into better margins for the processors. Improved plant utilitzation means a more efficient beef pipeline. Cow slaughter continues to increase weekly but remains well under prior year. Processors have maintained profitability since July — the longest period during the past few years.
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 958#, up 5# from 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 .2% from the previous week at 87.4. 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.
Fluctuating commodity prices have always presented a problem for restauranteurs. No restaurant wants to continually re-price items on the menu. Consumers are attentive to price increases and quickly notice upward pricing. Welcome to the world of a workaround. Some restaurants have opted to post a notice in small print at the bottom of a menu informing diners of a special surcharge of xx% added to the bill because of high fuel and labor costs.
The Cutout. The lean beef prices have struggled to hold ground under pressure from the imported beef. Cow slaughter is increasing seasonally. This past week’s slaughter volume helped improve plant untilization and efficiency. 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 provided broad coverage of the nation leading to new grazing opportunities for cattle for growing and breeding. The problem simply stated is a shortage of animals to fill those fields of grazing opportunities. 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. Much of the nation’s farm tracts will be left empty of cattle reserving the crop to be harvested for grain.
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. Most fields have been planted and some have an emerged crop. Warm weather will now be important to plant growth and grazing opportunities. The wildcard for a year that could provide the largest winter grazing in decades is availability of cattle. There simply may not be enough cattle to stock winter grazing sites. Recent rains in the desert southwest has activated hopes for desert grazing and the opening of the border will provide some limited supply of cattle.
Feedlots are in the early stages or rightsizing occupancy levels. Most feedlots have been operating at reduced capacity and many smaller feedyards are empty but right sizing will require closing some facilities. The process has started and will continue through next year. The nation’s largest feedyards are dominated by operating entities owned by Wall Street investment firms and those firms aren’t friendly to capital infusions or negative returns.
Seasonally health problems, that can occur anytime with the stress of weaning, worsen 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 and long term performance impairment. A $50 cwt. spread between weaned and unweaned calves is large, but sometimes justified. The spreads between weaned and unweaned calves is widening. Knowing more about the background of new purchases can be helpful including full health records.
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 over 800 lbs 4.00-6.00 higher in a light test; under 800 lbs steady to 4.00 lower. Feeder heifers steady to 3.00 higher, 600-700 lbs. 6.00-7.00 lower. Steer calves 10.00-15.00 higher, but under 500 lbs not well tested. Heifer calves under 500 lbs steady to 5.00 higher; over 500 lbs steady to 5.00 lower. Lighter weight un-weaned calve 5.00-10.00 lower. Demand moderate to good. Supply included: 100% Feeder Cattle (52% Steers, 41% Heifers, 7% Bulls). Feeder cattle supply over 600 lbs was 52%.
Compared to last week: Steer calves 10.00-20.00 higher, instance to 40.00 higher. Heifer calves 10.00-15.00 higher. Demand good for calves and farmers fairly active following last week’s much needed rains. Quality average to attractive. Buyers showing more discretion towards quality than number of days weaned. However temperature swings in the coming weeks will become more of a factor in days weaned. Following the heavy rains last week, wheat pasture that was planted well ahead of the rains is growing and thriving, while some other pastures that were just planted before the rains is having to be replanted as much of that wheat was washed down the creeks and rivers. Supply included: 100% Feeder Cattle (44% Steers, 39% Heifers, 17% Bulls). Feeder cattle supply over 600 lbs was 26%
Feeder Cattle Cash Index. The index is tracking the moves in cash prices. The Cattle Report has updated index reporting to provide a daily graph showing changes in price of the index.
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 continued to move lower. The current basis level is near +$1.00 in Guymon, Oklahoma — basis the December contract.
LIVE SECTOR SHOWING SIGNS OF STRESS
Owners of cattle in the live sector of the beef supply chain have enjoyed profitable times for much of the past three years with few interruptions. During that period, price downturns and bad news events were quickly overcome and profitability continued. This year began with positive margins but those soon turned negative. New problems and obstacles to profitability proved obstinate with no quick remedies. Beef prices were targeted as a proxy for inflation and affordability. The losses of recent months have created stress signals not seen in a long time in the industry.
The primary stressor is over capacity in the feeding sector. Cattle owners watched as over capacity in the processing sector created hundreds of millions of dollars of losses. It took those continuing losses to drive plant closings and right sizing slaughter capacity to restore profitability. Those same forces now are at work in the cattle feeding sector.
The largest cattle feeding operations are primarily owned by investment funds looking for small, reliable returns on their investment. The model was a leveraged fully protected feeding venture offsetting feeder cattle purchases with short live cattle contracts and long corn futures. Overcapacity and empty pens has left too many empty pens competing for too few replacement cattle. The fully protected and hedged program today locks in a $200+/head loss.
The second tier feeding companies are the custom feeders soliciting customers to take the risk feeding cattle to finish. Customers are choosing to sell rather than feed – leaving the custom feeding firms with the bad choice of buying a loser or leaving pens empty. Many operations are struggling with hesitant lenders unwilling to shore up financial stress with risky loans.
The solution like the processing sector will be feedyard closings. Lowering occupancy rates will not solve the problem because a half full feedyard must mark up feed cost to replace lost feeding efficiencies similar to the beef plant operating at 50% of plant capacities. It is well known that several feeding operations are on the market for sale. Unfortunately, it is not a good time to buy.
CARDINAL RULE FOR COMMODITY TRADING
“IF IT IS OBVIOUS, IT HAS GOT TO BE WRONG!”
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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