August 1, 2026
MARKETS
Sales volumes as of Friday afternoon were light but as the day moved to a close, volumes increased. Sales in the north were reported from $232-$235 with dressed sales $365-$370. These prices were $1-$4 higher live and steady to $5 higher dressed. Sales in the south were at $233 — $2-3 higher. Bids of $233 were still available on Saturday morning as packers attempt to enter next week with more inventory. Purchases in the north were extremely limited and asking prices will be higher Monday.
Disruption from Mother Nature was dominating the news this week. Both storms and heat were creating problems. Feedlots were reporting falling feed consumption and widely rumored death tolls were never verified but horror stories circulated all week. No one questions the increased damage to performance black hided cattle from intense heat and angus as a breed has come to dominate other breeds in beef production. Late period death loss in any feedyard with any cattle is a large economic loss.
Interest rates are always a feature in ag borrowing. The new Fed Chair announced steady rates but most sources are forecasting a rate rise in September. The high deficit spending and the depletion of the social security funds will pressure the budget creating a national budget with interest payments greater than defense spending. Longer term interest rates like the 10 year and 30 year treasury are moving higher with many expecting the 10 year to hit 5%.
This past week’s slaughter was an estimated 512,000 head — 16,000 under the previous week and a surprise to many observers. The sharp drop in this week’s slaughter should jump start the box prices that seasonally rally in August. The slaughter volume was 25,000 under last year. Both box prices and live cash prices for cattle are now trading under last year. The status for fed supplies will remain tight through year end and beyond, but many issues threaten a return of prices to historic highs.
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 moved lower, but following the publishing of slaughter for this week, most expect boxes to be in rally mode next week. 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 and cattle moved. The restricted number of available cattle is creating competitive prices that have surprised some buyers. Buyers still believe prices are $100 cwt. too high. The border is scheduled for opening the end of August in Douglas, Arizona but don’t expect a flood of cattle. Sonora and Chihuahua the two largest Mexican states for cattle have received generous recent rains.
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 softened to end the week. 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.
FOOD CHOICES MADE FOR YOU
Beef consumption is not exclusively dependent on individual choices made at the point-of-sale location. Many are the result of government programs, school menus, or military chow offerings. Local meals on wheels groups never ask recipients what they want for dinner. These programs tend to be budget minded and sometimes political. Knowing and understanding how these programs work is important to attempt to influence the decisions made by bureaucrats about what people should be eating.
Foremost among these programs is SNAP and the administration has attempted to limit some of the waste and abuse that has crept into this USDA program over the years. A few years ago, one in eight people qualified for food assistance in the SNAP program. That has now been reduced to one in ten. Work requirements have been added to qualifications and certain products can be disallowed by State waivers for sugary drinks and candy and more exceptions are anticipated. As the number of people in the program declines, no one will be able to determine the amount of beef purchased for those out of the program so the net loss will be impossible to calculate.
School lunch programs are important to the beef industry. Menus are often influenced by current political as well as nutritional thought. Dietary guidelines by experts often chosen by the political party of the President set the stage for food hierarchies. Secretary Kennedy has selected experts expressing the value and importance of red meat in the diet and this has benefitted the cattle industry. Separating fresh red meat from processed meat has enhanced the health values for fresh beef through scientific studies.
Military menus naturally tend to include beef and recruitment of citizens into the military would be difficult if vegetarian diets were common. Various charity programs administer food to those home restricted citizens that are often older and have disabilities. Those food choices are usually made locally and are more according to strict budgets rather than food preferences.
Beef is a net beneficiary of current nutritional thinking. More experts now recommend higher daily protein intake, and iron deficiency among women has reached alarming levels. Preventing politics from interfering with heathy food choices will always be a problem.
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.
Contact Us
The CATTLE REPORT will strive to answer all emails. Our editorial views are not always popular and sometime create controversy and are sometimes flat out wrong.