April 26, 2026
MARKETS
Trading is concluded for the week with a few cattle in Kansas gaining a dollar on Friday at $247 live. Packers seem willing to add more inventory but struggled to add more at the lower price levels. Live prices were mostly at $246 in Kansas and Texas. In the north cattle traded for $246 live and $386 dressed — both $2 lower.
The choice/select spread bounced back and forth between premium and discount this week. Retailers are now dealing with an abundance of high quality cuts and strange and unfamiliar pricing patterns are developing. Prime and Certified Angus steaks are priced flat with choice steaks. Branded and Wagu offerings are disappearing.
This past week’s slaughter was 529,000 head — 15,000 over the previous week, and 26,000 under last year. The larger slaughter increased efficiencies at the beef plants and made a small contribution to negative margins by reducing input costs. Boxed beef ended on a strong note giving some hope of an uptick in spring demand for beef.
Optimism for next week crept into the futures market Friday.
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#, 6# lower than the prior week, and 41# 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 .05% from the previous week at 89.1%. The quality grade should begin a slow decline lasting into summer, but with out weights at record highs, grading will remain high historically.
The Weekly Steer and Heifer Grading Report is indicative of regional supplies of choice and prime cattle and often is determinative of regional differences is live price. The report is also reflective of the current status of fed cattle offerings in each area.
Forward Cattle Contracts: Forward contracts will always bear some relationship to the corresponding futures month closest to the delivery month for the cattle. 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 overheated replacement market will slow the forward contracting of purchases this year. The discounted price in the deferred futures contracts will not encourage cattle owners to forward price cattle at a loss. Favorable forward basis levels can always incentivize sellers to enter into basis contracts to be priced later.
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 transition from a historically soft seasonal period to the spring period that has featured improved demand. Demand normally improves following Easter. The high price of beef is always a threat or risk of damage to demand. To date it has been slight but there can come a tipping point and everyone is on the lookout for that point. Beef must suffer a loss of marketshare, not because of price, but simply because we are producing less beef.
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 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. Box prices strengthened to close the week. Some expectation for improvement in the middle meats was apparent as we near spring and more cookout interest in steaks. Slaughter volumes will continue to be dictated by processing margins. The normal season pattern of increasing spreads in the quality grades may not develop this year as northern calves placed on feed come to market.
The impact of larger cattle and higher quality grade percentages has been to provide consumers with increased volumes of higher quality beef. USDA Prime now exceeds the quantity the USDA Select grade. An abundance of Certified Angus beef has caused gyrations in pricing that sometimes loses the premiums in the maketplace. Retail stores are reformating both the cuts and the marketing strategies to adjust to the new reality of beef offerings.
Replacement markets
Cattle are being removed from wheat fields earlier than usual pushing April placements higher, but May may show a decline from last year. The wild card remains much of a dry belt including eastern New Mexico, the Oklahoma and Texas Panhandles, Wyoming and Montana and eastern Colorado. Until these areas receive meaningful moisture, the demand for replacement cattle of all types will be on hold. The replacement prices are beginning to show signs of weakness and that may continue moving forward.
Modeling the breakevens for current purchases is enough to stress the most calm and rational of lenders but large negative margins at the feedlot level are foretelling trouble in the feeding sector. On any given turn of inventory, the negative margins at purchase might survive the loss by future cash increases far beyond current estimates. Eventually those margins will turn into losses and at the extremes, the current estimated losses will become magnified by a cash market that turns sharply lower instead of higher in the future marketing periods. Could a feedlot animal lose $1000/head?
The drought monitor is showing some areas of stress. The dry conditions in the central plains and southeast sets the stage for a high risk for wildfires. Nebraska and now Geogia has suffered wildfire losses of the magnitude of several hundred thousand acres. Moisture conditions and wild fire destruction is playing into the rebuilding of the nation’s cattle herd.
Compared to last week: Feeder steers mostly steady, 900-1000 lbs 2.00-4.00 lower. Feeder heifers 2.00-4.00 lower. Steer and heifer calves lightly tested and unevenly steady. Quality mostly average. Demand remains good but buyers a little more picky for kind. Cattle futures closing lower, following a positive move on the open. Cattle continue to trickle in off wheat pasture. Cold front came in late last week and
has moved temperatures back to more spring like. Supply included: 100% Feeder Cattle (59% Steers, 39% Heifers, 2% Bulls). Feeder cattle supply over 600 lbs was 67%
Compared to last week: Steer and heifer calves 10.00-15.00 lower, conservatively. The only highlight on the day was 5 weight heifers were 5.00 higher as a couple of buyers had strong orders for that weight class. Overall quality was very plain. The supply included 35% unweaned cattle. CME futures were down again today, which kept some buyers completely out of the market, today. Supply included: 100% Feeder
Cattle (44% Steers, 51% Heifers, 5% Bulls). Feeder cattle supply over 600 lbs was 34%
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 firmed. The most recent figures set corn acres at 95 billion acres– down 3 billion from last year. The basis levels are rising with the rising energy cost that makes transportation more expensive. Corn basis levels in Guymon, Oklahoma are at +$.65 — basis the July contract.
THE SMALLER THEY ARE THE HARDER THEY FALL
There is never consensus on when a bull market ends. Many have been calling various downturns the end of the bull market for over a year, and those forecasts are long forgotten and fundamental evidence of the end is not yet apparent. We all know the end of the bull market is nearer but so many complex factors dictate the end of a bull market that forecasting it is nearly impossible.
The most vulnerable purchases to a market downturn are the lightest cattle by weight. The reasons are simple. Cattle bought at a light weight take a longer period to reach finish. A day-old dairy calf or a lightweight weaner calf will go through a weaning phase, then a growing phase possibly on pasture then finishing in the feedyard. All the phases take longer today than in the past because we are finishing cattle at heavier weights.
The pricing of light weight animals today is driven by demand and not price forecasts for the next couple of years. The high price is an effort to ration and allocate scarce resources to the highest bidder. Heavier replacement cattle find a result in a shorter time frame and buyers can see price forecasts even though they may not like them. Beef producers generally are committed to beef operations which include physical facilities, land, and employees. Those fixed costs continue and must include cattle if they are to continue to exist.
The peril to owners of the light cattle is the price gaps they can’t see because no price models are provided. A feedlot purchasing a 800# steer can see the negative margin provided by the futures prices trading contracts at the end of this year. The owner of a 400# calf is looking into empty space for a price of a finished animal in 2027. Liquidity, in the distant future’s contracts, is all but nonexistent and bid/ask spreads are frequently dollars apart.
MANDATORY PRICE REPORTING
mpr.lpgmn@usda.gov
This email address is used for comments for Livestock Mandatory Price Reporting (LMPR). You can also leave a voicemail at 202-720-1990 if needed.
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.