October 3, 2026
MARKETS
In the north live prices were established at $221-$222 with southern sales mostly at $226. Dressed prices this week range from $345-$350. This is the third week in a row of mostly steady prices.
The spreads between north and south have widened. This will compel movements between the regions, but freight is expensive and carcass yield loss is meaningful. The natural movement is from Nebraska to Kansas but most slaughter capacity in Kansas is in the southwest corner of the state. Slaughter volumes are returning to a more normalized number and that is pressuring the box prices.
This were recovered slaughter volumes to a normalized 548,000 head — 64,000 over the previous week and on par with most recent weeks. It fell 20,000 under last year. The threat of immigration arrests caused beef plant workers to stay at home last week but reassurances of safety from harassment brought them back to work. Processors have maintained profitability since July — the longest period during the past few years. The status for fed supplies will remain tight through year end.
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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#, 2# lower than 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 .7% from the previous week at 87.3. 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.
USDA Prime cuts are carving out a larger slice of the grocery offerings. This is changing consumer decisions at the meat counter. Spreads between choice offerings and prime cuts historically have been wide and with more product and difficulty moving expensive cuts, many Prime cuts now sell at smaller incremental price spreads to choice causing many consumers to upgrade their purchases. Casualities in this change have been branded or all natural products that are commonly passed over by consumers.
The Cutout. Box prices were mixed to close the week. This week’s slaughter volume jumped from last week’s small number to the largest volume since January. 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 across a broad national coverage will create grazing opportunities for new cattle for growing and breeding. 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.
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 and more is expected. 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.
The movement of cattle, both large and small, from Mexico to the U.S. is becoming more normalized as the second crossing of St. Teresa near El Paso opens. Recent rains have hampered smooth, steady and consistent crossing volumes. Inspection on both sides of the border have been subjected to extra scrutiny as government people work to do their job and prevent new closings. All Mexican cattle are now required to have a RFID tag.
Seasonally health problems can begin 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. A $50 cwt. spread between weaned and unweaned calves is large, but sometimes justified. The spreads between weaned and unweaned calves is widening. Some sellers will also attempt to avoid marketing calves through local auction sales to eliminate extra movement and costs.
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 mostly steady to 3.00 lower. Feeder heifers unevenly steady. Demand good for feeder cattle. Steer calves 5.00-15.00 lower. Heifer calves 2.00-8.00 lower. Demand moderate for calves. Quality average to attractive, end plain. Most cattle in average flesh conditions, few fleshy. Weigh-ups average to full. Wheat farmers busy sowing wheat or working ground ahead of forecasted rains for this week. Supply included: 100% Feeder Cattle (57% Steers, 38% Heifers, 5% Bulls). Feeder cattle supply over 600 lbs was 65%
Compared to last week: Steer calves over 500lbs 5.00-10.00 lower, under 500lbs unevenly steady. Heifer calves over 500lbs 5.00-10.00 lower, under 500lbs 15.00-20.00 lower. Quality was noticeably lower this week compared to last week, which contributed to the softer market. With many farmers occupied in the fields and rain forecasted across the trading area, buyer interest was limited. With roughly one-third of the cattle remaining, several buyers left, reducing competition and weakening demand through the remainder of the sale. Today’s supply included 69% un-weaned cattle. Supply included: 100% Feeder Cattle (39% Steers, 46% Heifers, 15% Bulls). Feeder cattle supply over 600 lbs was 28%
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. USDA increased the September 1 ending stocks for corn based mainly on less useage. Corn prices have adjusted downward to the new balance sheet number. The current basis level is near +$1.00 in Guymon, Oklahoma — basis the December contract.
A NEW PECKING ORDER
The trend line over the past decade has been the movement from live FOB prices at the feedyard to outcome based selling. Grid selling comes in two forms – formula or committed cattle each week to one plant or negotiated grid. Formula cattle are generated by long term contracts. Negotiated grids involves weekly negotiated pricing — either for the base price, or the grid premiums and discounts, or both. The commitment can be a pen at a time or for the entire feedyard. One feedyard might sell to different buyers at different negotiated prices. All grid selling methods require slaughter and USDA carcass information to complete the transaction.
In more recent times of reduced slaughter supplies, the leverage of sellers has increased bringing the advantages of selling using negotiated grids. Most formula contracts specify a base price determined by the spot cash prices and usually those are the lesser quality cattle. Grid sellers can both negotiate the base price and the grid premiums and discounts. The result has been improvements in price for grid sellers over both formula and flat dressed sales.
While today Mandatory Price Reporting fails to deliver the transparency promised in the law, it does provide some benchmarking information of final outcomes of grids — even in the regions not reporting because of confidentiality. The final prices, achieved in dollars per cwt. for negotiated grids, exceed formula sales by two to three dollars each week.
Marketing cattle requires constant attention to the best available option open to the cattle owner. This requires knowledge of the capabilities of the animals as well as the various pricing options available. Proximity to the plant will always be important whether selling in spot cash, formula or grid. While camera grading has become more influential in grading, not all plant grading is the same. Finally, honesty and integrity do matter in all trading choices.
CARDINAL RULE FOR COMMODITY TRADING
“IF IT IS OBVIOUS, IT HAS GOT TO BE WRONG!”
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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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