August 8, 2026
MARKETS
Sales volumes shot up higher this past week for two reasons. First packers entered the week short bought needing cattle for this week in the north. Second, packers are anticipating a run up in beef demand previewing the Labor day weekend. They paid little attention to futures prices and instead concentrated on building inventories. In the north live prices ranged from $235-$238 and dressed sales from $370-$380. Live prices were $2-3 higher and dressed $5-$10 higher. In the south, live sales were mainly at $235 or $2 higher.
People tend to overstate their profits/head and understate their losses. Things never go according to plan and many or most close outs starting this month are reporting losses. Those losses are likely to continue and more likely to increase. Fighting replacement costs is painful as competition forces overpayment for cattle destined for the nation’s feedlots.
This past week’s slaughter was an estimated 509,000 head — 3,000 under the previous week and 28,000 under last year. The sharp drop in the past three weeks slaughter is priming the pump for a recovery in box prices and this began on Friday when prices stabilized and improved. 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 941#, 4# lower than the prior week, and 27# 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 up .2% from the previous week at 86.6%. 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.
Retailers will be looking beyond the summer heat. Improved demand should be expected as summer temperatures segue into cooler daily highs. Lower box prices converted to lower prices for individually priced portions on supermarket shelves, will catch the eye of price weary consumers. 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 box prices were positive at week’s end. Seasonally box prices advance in August historically. Box prices are now 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 replacement 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: Feeder steers lightly tested and few cattle sold 5.00-10.00 higher. Feeder heifers 5.00-15.00 higher. Steer calves unevenly steady. Heifer calves 10.00-15.00 higher. High heat continues after a little reprieve over the weekend. More 100+ degrees are expected this week. Many pastures drying out fast, bringing some cattle to town. Demand good. Today’s sale also included a Special Angus sale. These cattle have to be at least 60 days weaned, 2 rounds of shots and sired by registered Angus Bulls. These cattle are identified in the report as Value Added. Supply included: 100% Feeder Cattle (48% Steers, 49% Heifers, 4% Bulls). Feeder cattle supply over 600 lbs was 64%
Compared to last week: Feeder steers and heifers 10.00-20.00 higher. Feeder heifer quality was better than feeder steer quality. Buyers were active for all classes of cattle. Steer calves 10.00-15.00 higher. Heifer calves 15.00-20.00 higher. Calf demand good for steers and very good for heifers. Calf quality was better than in the past couple of weeks. The bulk of calf supply was still un-weaned calves at 55%. Triple digit
temperatures are forecasted for the next eight days for the trading area. Supply included: 100% Feeder Cattle (52% Steers, 42% Heifers, 6% Bulls). Feeder cattle supply over 600 lbs was 80%
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 at week’s end. Private sources will begin to assess and forecast this year’s corn crop. 2026 has been a stable year for feed prices. Balance sheet issues such as useage, ethanol demand, exports and other factors will determine prices in the coming year. Corn basis levels in Guymon, Oklahoma are at +$1.10 — basis the September contract.
THE FRAGILITY OF THE MARKETS
Watching the correlation between cash markets and futures is an experience in confusion. Futures price march to their own drummer, and no one knows the drummer. Unreliable sources of information is converted into orders on the futures exchanges where insufficient liquidity cannot handle the pressure. When orders push futures contracts around with little regard to market fundamentals, the price movements become exaggerated in both directions — fragile markets. Market makers whose job it is to correct pricing disparities are lost in translation.
The replacement market is disconnected from the fed markets. The cash index for feeder cattle is disconnected from the feeder futures awaiting last minute corrections to cash settle to the index. Industry players are sitting on the sidelines attempting to make sense out of the non-sensical. At the core of the problem is overcapacity both in processing and feeding sectors.
The starting point for those in the beef pipeline is the purchase of an animal. Whether you are operating as a stocker grazer or a feedlot customer, the initial purchase price carried to a finishing point is under water a couple hundred dollars a head. One fact that has been proven true is the Buyer will be undeterred from making the purchase so long as the previous purchases resulted in a profit. It is only when the red ink starts to fly that the players stop long enough to examine what they are doing and where they are going. Sometimes self-knowledge is forced upon cattle owners by lenders.
Feedlots, like beef plants, will lose money until they right size their facilities. The rebuilding of the national herd is occurring now, but it is doubtful that the numbers will return to 2022 levels. In the meantime, some processing and feeding facilities will be forced to close. Losses in processing and feeding are occurring now and will continue until some facilities close.
Futures traders are aware of this fact and because of the structure of the industry, futures prices will be extremely fragile — meaning prone to crash on any negative news, or the latest rumors. Outside pressures have descended on the markets. Through six months of this year, beef imports are up 354 million pounds (+12%) totaling nearly 3.3 billion pounds. Beef exports during the same period fell 221 million pounds (-16%) to nearly 1.2 billion pounds. Imports and exports will continue to dog domestic prices the last half of this year, while domestic supplies will continue to dwindle.
CARDINAL RULE FOR COMMODITY TRADING
“IF IT IS OBVIOUS, IT HAS GOT TO BE WRONG!”
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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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