Ag Center Cattle Market Report & Analysis
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><p id=\"isPasted\" style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; color: var(--wp--preset--color--vivid-red) !important; font-size: 19px; line-height: 1.6; font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><strong style=\"box-sizing: inherit; max-height: 1e+06px; font-weight: bold;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\">February 3, 2025</span></strong></p><h2 style=\"box-sizing: inherit; max-height: 1e+06px; font-family: Oswald, sans-serif; font-weight: bold; margin: 0px 0px 1rem; color: var(--wp--preset--color--vivid-red) !important; font-size: var(--wp--preset--font-size--large) !important; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\"><strong style=\"box-sizing: inherit; max-height: 1e+06px; font-weight: bold;\">THE MARKETS</strong></span></h2><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\">Attention will be diverted from the marketplace this week to the tariff issue and the many questions raised by this order. The government announced the tariffs will become effective at midnight on Tuesday the 4th of February. Canada responded with a 25% tariff on all American goods exported to Canada. Mexico promised an appropriate response with their own tariffs. The current understanding is all tariffs will be paid by the buyer/importer and will be due on entry. Less clear is whether the duty will apply to cattle purchased before the announcement and if they will be exempted. Border crossings stopped by the screwworm case will resume this week as will purchases every week of Canadian cattle destined for beef plants in the northwest. Oil futures were sharply higher and corn lower on the prospect of tariffs on corn exported to Mexico.</span></p><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\">This past week featured low volumes, higher prices in the south, flat prices in the north and uncertainty over the meaning of Trump’s tariff orders for Mexico and Canada. Sales in south at $208-209 reflected $7-8 higher prices but many of the higher quality cattle were unsold at week’s end with packers bidding $209 Friday and only buying a few cattle. In the north live prices were mainly $209-$211 with only modest volumes. Dressed sales ranged from $328-$332 — mostly $330 or steady. Plants will be likely to trim the slaughter next week.</span></p><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\">Processors slaughtered 600,000 cattle this past week up 1,000 from the previous week, and down 32,000 from last year. Last year’s slaughter rates were impaired by winter storms. Box prices softened this past week and processing margins remained deep in the red. The fed cattle portion of the weekly slaughter continues to make a larger percentage of the total slaughter than prior years with cow slaughter of both dairy and beef cows in decline.</span></p><h2 style=\"box-sizing: inherit; max-height: 1e+06px; font-family: Oswald, sans-serif; font-weight: bold; margin: 0px 0px 1rem; color: var(--wp--preset--color--vivid-cyan-blue) !important; font-size: 27px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\">JANUARY 1 CATTLE INVENTORY REPORT</span></h2><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\">USDA released the cattle inventory with numbers slightly exceeding pre-release guesses. The largest variance was the calf crop almost flat with last year and positive for the industry. USDA mails out surveys to acquire the data used for the report and participation over the years has decline from 85% participation to 65% responders. There are major flaws in the reliability of the numbers with this type of acquisition of non-audited data. The full report is posted at the end of this newsletter.</span></p><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; color: var(--wp--preset--color--black) !important; font-size: 19px; line-height: 1.6; font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\"><a href=\"https://www.cmegroup.com/markets/agriculture/livestock/live-cattle.quotes.html\" style=\"box-sizing: inherit; max-height: 1e+06px; color: rgb(23, 79, 134); background-color: transparent; text-decoration: underline; font-weight: 400;\">CATTLE FUTURES</a>. Futures are expected to be sharply higher following the tariff news.</span></p><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\">B<a href=\"https://www.ams.usda.gov/mnreports/ams_3492.pdf\" style=\"box-sizing: inherit; max-height: 1e+06px; background-color: transparent; color: rgb(23, 79, 134); text-decoration: underline; font-weight: 400;\">enchmarking</a>. 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.</span></p><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\">The <a href=\"https://www.ams.usda.gov/mnreports/ams_2700.pdf\" style=\"box-sizing: inherit; max-height: 1e+06px; background-color: transparent; color: rgb(23, 79, 134); text-decoration: underline; font-weight: 400;\">Comprehensive Fed Cattle Weekly Report</a> 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 917# down 11# from prior week and 41# heavier than last year. Last year severe weather harmed cattle performance and diminished carcass weights. 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% at 81.80%. This was 2.6% under last year.</span></p><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\"><a href=\"https://www.ams.usda.gov/mnreports/nw_ls196.txt\" style=\"box-sizing: inherit; max-height: 1e+06px; background-color: transparent; color: rgb(23, 79, 134); text-decoration: underline; font-weight: 400;\">The Weekly Steer and Heifer Grading Report </a>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.</span></p><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\"><a href=\"https://www.ams.usda.gov/mnreports/ams_2480.pdf\" style=\"box-sizing: inherit; max-height: 1e+06px; background-color: transparent; color: rgb(23, 79, 134); text-decoration: underline; font-weight: 400;\">Forward Cattle Contracts</a>: 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. </span></p><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\">Formula and Negotiated Grids. <a href=\"https://www.ams.usda.gov/mnreports/ams_3492.pdf\" style=\"box-sizing: inherit; max-height: 1e+06px; background-color: transparent; color: rgb(23, 79, 134); text-decoration: underline; font-weight: 400;\">The Price and Distribution Report </a>delineates the various selling methods and net results. The <a href=\"https://mymarketnews.ams.usda.gov/Cattle_Contract_Library\" style=\"box-sizing: inherit; max-height: 1e+06px; background-color: transparent; color: rgb(23, 79, 134); text-decoration: underline; font-weight: 400;\">Cattle Contracts Report</a> 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.</span></p><div style=\"box-sizing: border-box; max-height: 1e+06px; display: flex; margin-bottom: 1.75em; flex-wrap: nowrap; align-items: center; gap: 2em; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-size: 19px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><div style=\"box-sizing: inherit; max-height: 1e+06px; flex-grow: 0; min-width: 0px; word-break: break-word; overflow-wrap: break-word; margin: 0px; flex-basis: 50%;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\"><iframe src=\"https://embeds.agcenter.com/cattlereportchart/choice_cutout\" style=\"box-sizing: inherit; max-height: 75vh; width: 551px; min-height: 55px; height: 55px; border: none;\"><span class=\"fr-mk\" style=\"display: none;\"> </span></iframe></span></div><div style=\"box-sizing: inherit; max-height: 1e+06px; flex-grow: 0; min-width: 0px; word-break: break-word; overflow-wrap: break-word; margin: 0px; flex-basis: 50%;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\"><iframe src=\"https://embeds.agcenter.com/cattlereportchart/select_cutout\" style=\"box-sizing: inherit; max-height: 75vh; width: 551px; min-height: 55px; height: 55px; border: none;\"><span class=\"fr-mk\" style=\"display: none;\"> </span></iframe></span></div></div><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\"><a href=\"https://www.ams.usda.gov/mnreports/lswbfrtl.pdf\" style=\"box-sizing: inherit; max-height: 1e+06px; background-color: transparent; color: rgb(23, 79, 134); text-decoration: underline; font-weight: 400;\">Beef Feature Activity Index.</a></span></p><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\">The attention of the market will turn to the middle meats as the holiday season approaches. Beef features will be highlighted by the ribs that will be popular for holiday fare.</span></p><p style=\"box-sizing: inherit; max-height: 1e+06px; letter-spacing: 0.5px; margin: 0px 0px 1rem; font-size: 19px; line-height: 1.6; color: rgb(51, 51, 51); font-family: Oswald, sans-serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;\"><span style=\"font-family: Verdana, Geneva, sans-serif; font-size: 12pt;\"><a href=\"https://www.ams.usda.gov/mnreports/lsddcbs.pdf\" style=\"box-sizing: inherit; max-height: 1e+06px; background-color: transparent; color: rgb(23, 79, 134); text-decoration: underline; font-weight: 400;\">The Cutout</a>. The cutout found support and leveled out at week’s end. The difficulty will be aligning the new input cost from the cash market for live cattle to a new price level for the retailer. Retailers never seem sensitive to the plight of the processors losing money. Packers will be managing the slaughter volumes attempting to stem the flow of red