by Andrew Griffith, Livestock Marketing Specialist
January 9, 2026
FED CATTLE
Fed cattle traded $1 higher this week compared to a week ago on a live basis. Prices on a live basis were mainly $232 to $233 while dressed prices were mainly $365.
The 5-area weighted average prices thru Thursday were $231.42 live, up $0.99 compared to a week ago and $364.99 dressed up $4.99 compared to last week. A year ago, prices were $202.61 live and $320.08 dressed.
Cattle feeders are making money and packers are losing large sums of money. All it takes to demonstrate packers are losing money is what they are paying for finished cattle on a dressed basis and what they are being paid for boxed beef. At this time, the price of a dressed animal is higher than the value of the cutout. This means packers are losing on the margin plus whatever costs they have to fabricate carcasses. On the opposite side of the coin, cattle feeders are making a enough profit to keep the cattle flowing. Despite profits on these cattle, the buy-back to place cattle on feed means they are betting finished cattle prices will continue to increase. The question is if the cattle market is a house of cards, or if it is built on the Rock?
BEEF CUTOUT
At midday Friday, the Choice cutout was $355.24 down $1.55 from Thursday and down $5.65 from three weeks ago. The Select cutout was $347.54 down $0.62 from Thursday and up $3.90 from three weeks ago. The Choice Select spread was $3.80 compared to $13.35 a three weeks ago.
The beef market is entering a time period of softer sales following the holidays. The Choice Select spread has narrowed as it typically does in the dead of winter. The narrowing of the spread has historically been influenced by the seasonal shift in eating habits from middle meats (steak cuts) to end meats (roasts) where quality grade is not as important to the consumer since the preparation of end meats results in little difference between the two quality grades when eating. Though this is the historical perspective, the primary driver of the Choice Select spread in today’s market is the quantity of Select relative to Choice and Prime grade beef. In the past few years, the percentage of beef grading Prime and Choice has increased significantly while the percentage of beef grading Select has declined. Overall, the higher grading percentage has added value to beef industry participants, but it has also increased the value of Select since less is available. There is a chance the Choice Select spread will negative at some point this winter, but it will not last long.
OUTLOOK
OUTLOOK: Based on Tennessee weekly auction market averages, steer prices were $20 to $30 higher this week compared to last full week of auctions while heifer prices were $10 to $20 higher than that same week. Slaughter cow prices were $4 to $8 higher compared to the last sale week in December while slaughter bull prices were $2 to $6 higher than the same week. Trends following a two-week hiatus in the market may or may not be of much value. What is clear following the holidays is buyers are hungry for cattle and the hot ticket is anything to put on grass. Grass cattle buyers are already in high gear, which means prices will be supported for lighter weight calves from now through the end of March. Grass cattle buyers typically delay purchasing cattle until the end of January or the beginning of February with demand being strongest in March. However, some of these producers may be concerned about the availability of cattle. It is a valid concern, but it still does not make it wise to overpay for cattle. Based on prices paid this week in Tennessee, 527 pound steers averaged $413.79 per hundredweight, which is $2,181 per head. Similarly, 524 pound heifers averaged $366.70 per hundredweight, which is $1,922 per head. The assumption for this brief analysis is those cattle will be grazed through the spring and summer and marketed in August or September. Thus, if the steers average daily gain is 1.5 pounds over 210 days then they will be marketed at 842 pounds. Similarly, if the heifers are marketed at 210 day with an average daily gain of 1.3 pounds then their marketing weight will be 797 pounds. Using the current futures market price for August and September and historical basis for 50,000 pound loads in Tennessee the steers will average $2,863 per head while the heifers will average $2,631 per head. This means there is $682 to put 315 pounds on the steers resulting in a $2.16 per pound value of gain. Similarly, there are $708 to grow the heifer 273 pounds, resulting in a value of gain of $2.60 per pound. Profit potential exists, but risk also abound with high prices.
ASK ANDREW, TN THINK TANK
Where is my time best spent? Where is my time most valuable? What needs my time most? There are probably more questions similar to these three, but the answer to each of these questions may be different, which means if a person can think of a different question in this category then there may be yet another answer. These are questions asked and answered by people who have more to do than there is time. However, those who answer them successfully are generally satisfied with the results. A person’s time is best spent doing what creates the greatest good for their objectives and that achieves their goals. If a person’s goal is to maximize dollars in their pocket, then their time is most valuable doing the things that generate profit, which may be working or it may be putting people to work for them. What needs a person’s time most is generally what is underperforming relative to its value. For me, the answer is always faith, family and farming. I rarely get it correct, but these are where my time is best spent, most valuable, and needs me most.
Please send questions and comments to agriff14@utk.edu.
FRIDAY’S FUTURES MARKET CLOSING PRICES
Friday’s closing prices were as follows: Live/fed cattle –February $233.73 -1.55; April $234.68 -1.55; June $229.75 -1.53; Feeder cattle –January $360.73 -1.75; March $354.70 -3.03; April $353.05 -3.58; May $350.33 -4.03; March corn closed at $4.46 down 1 cent from Thursday.