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The Weekly News Source for Wyoming's Ranchers, Farmers and AgriBusiness Community

Market update

by Wyoming Livestock Roundup

In the past two weeks, the fed cattle price has been modestly firmer than in the beginning of the month, with a one dollar per hundredweight (cwt) improvement, averaging $124 per cwt most recently. Packers have continued to support the market at this stagnated price level with no fundamental reason to move bids higher. Early in the week of Oct. 25, fed cattle bids in Texas were reported up to $126 per cwt and purchases came earlier than anticipated.

             The fed cattle carryover has been increasing throughout October, indicating an ample supply of market-ready cattle. Last week’s 661,000 federally inspected slaughter total was a very positive note after a couple of smaller totals in the prior two weeks. Specific to fed steers and heifers, the 54,000 head total on Oct. 23 helped boost the weekly sum to 9,000-plus head, a total 1.7 percent larger than the prior week.

The fourth quarter seasonal price pattern in the past five years has seen a 12 percent increase from the middle of September through year end. The weekly fed cattle carryover will need to shrink before packers see a supply incentive to move bids significantly higher.

The Oct. 22 Cattle on Feed report came in generally as expected, with the exception of a placement number that was 2.9 percent smaller than September 2020 placements. This factor injected optimism into Live Cattle futures early this week, following the disappointing close on Oct. 22.

Price spreads between carcass quality grades continue to run near record-wide. The Certified Angus Beef (CAB)/Choice price spread narrowed a bit last week, but at $17.59 per cwt, it’s still $5.54 per cwt higher than a year ago.

The return on Prime carcasses has strengthened greatly in the past month. The reported average Prime grid premium paid by packers in mid-September was $20.57 per cwt. The premium for the week of Oct. 25 was reported at $28.38 per cwt, a 40 percent increase.

The boxed beef market looks to have found a bottom last week, as daily cutout prices began to tick higher Oct. 28-29. The upward drift continued Oct. 25-26 with prices firming up. As previously discussed, fourth quarter beef demand has been slow to flip the downward cutout trajectory to the upside. Buyers have pushed back to a degree, as boxed beef values have found record high territory this fall.

From here forward, middle meat demand should show continued life with winter holiday buying in the sights of protein buyers.

Paul Dykstra is the assistant director of supply management and analysis at CAB. He can be reached at

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