by Andrew Griffith, Livestock Marketing Specialist
January 23, 2026
FED CATTLE
Fed cattle traded steady to $2 higher this week compared to a week ago on a live basis. Prices on a live basis were mainly $233 to $235 while dressed prices were mainly $370.
The 5-area weighted average prices thru Thursday were $231.93 live, down $2.52 compared to a week ago and $364.75 dressed up $2.75 compared to last week. A year ago, prices were $204.14 live and $322.15 dressed.
Once again, the 5-area weighted average prices thru Thursday carry little value this week because they only represent about 2,300 head of cattle. However, cattle trade did gain some momentum on Friday morning with players in both the South and the North coming to terms on a price to move cattle. This week, the futures market was kind to cattle feeders as the market tried to bounce back from last Friday’s freefall. Cattle feeders willingness to holdout on moving cattle has resulted in packers having to shell out a few more dollars per head this week compared to last week. The cattle feeder maintains leverage in the current environment and should for several more months.
BEEF CUTOUT
At midday Friday, the Choice cutout was $368.70 up $1.25 from Thursday and up $6.79 from a week ago. The Select cutout was $361.30 down $0.43 from Thursday and up $1.00 from last week. The Choice Select spread was $7.40 compared to $1.61 a three weeks ago.
Packers are certainly relieved to know they are achieving higher boxed beef prices. The fairly strong positive price movement this week in Choice boxes is not the most typical price movement, but still welcome by packers. It is somewhat interesting how quickly the Choice Select spread has widened in one week when the expectation based on history is that the spread would remain relatively low for the time of year. The Choice Select spread is still narrow compared to what the yearly average will likely be, but the demand for Choice beef does not tend to be far superior to Select beef during the winter months when slow cooking tends to dominate the market. It may take a couple more weeks to know if consumers are already shifting back to their middle meat preference and thus Choice steaks taking center stage. In the meantime, the one concern is winter weather negatively influencing beef consumption in the short run. Any slowing of beef movement and disappearance can and will influence wholesale beef prices.
OUTLOOK
Based on Tennessee weekly auction market averages, steer prices were unevenly steady this week compared to last week while heifer prices were also unevenly steady compared to a week ago. Slaughter cow prices were $1 to $3 higher compared to the previous week while slaughter bull prices were $2 to $3 higher than one week ago. The price trends this week varied across auction markets. Some markets experienced extremely strong prices this week compared to last week while other markets witnessed much softer prices compared to the previous week. There is no rhyme or reason by just looking at the price data, but one could likely assume the quality of cattle at some sales may have been superior compared to other sales this particular week. Based on a quick look at the price data, 550 pound steers likely averages close to $4.25 per hundredweight, which is more than $2,300 per head. This means there were some 550 pound steers trading over $2,400 per head in Tennessee on the upper end of the price range. Based on feeder cattle futures and an expected marketing date of June, the value of gain on this steer exceeds $2 per pound. This sounds like a good purchase if the assumption is the market maintaining its current expectations or increasing. However, margin operators have to have the greater margin expectation to take on the financial risk of purchasing cattle at this price level. Compared to three or four years ago, there is the potential to make more money in the margin business today compared to a few years ago. However, there is also the potential to lose a greater quantity of money today than a few years ago. Not only is there more money to be lost, but the interest expense is much greater than a few years ago. For easy figuring, assume $1,000 to purchase a calf a few years ago at 3 percent interest over six months is $15 whereas today 6 to 7 percent interest on $2,300 for six months would be closer to $70 to $80 per head. Those are real dollars in the production model.
The January cattle on feed report for feedlots with a 1000 head or more capacity indicated cattle and calves on feed as of January 1, 2026 totaled 11.45 million head, down 3.2% compared to a year ago, with the pre-report estimate average expecting a decrease of 3.2%. December placements in feedlots totaled 1.55 million head, down 5.4% from a year ago with the pre-report estimate average expecting placements down 6.9%. December marketing’s totaled 1.77 million head up 1.8% from 2025 with pre-report estimates expecting marketings up 1.7%. Placements on feed by weight: under 700 pounds down 6.5%, 700 to 899 pounds down 5.0%, 900 pounds and over down 2.4%.
ASK ANDREW, TN THINK TANK
A couple of questions related to the international beef market were asked this week making this an appropriate time to discuss international trade expectations in 2026. First and foremost, lean beef imports will dominate the market due to the strong demand for ground beef and the need for more lean beef product to fulfill that demand. Australia will likely continue to be the lead import source of lean grinding beef, but Brazil will do everything it can to ship more of its product North. There is no doubt there will be a spike in Brazilian beef imports in January as they attempt to fill every ounce of the rest of the world (ROW) quota to capitalize on the lowest tariff rate possible. Once that quota is filled, Brazilian beef imports will be subject to a higher tariff rate, which has historically been 26.4 percent. The assumption is that it will stay at that level, but with President Trump’s intentions to reduce ground beef prices, that tariff rate could be adjusted. It is difficult to guess what President Trump and his administration may do in this environment.
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 $234.90 +2.53; April $236.93 +2.10; June $232.50 +1.60; Feeder cattle –January $364.80 +1.08; March $360.18 +0.90; April $358.75 +0.80; May $356.05 +0.58; March corn closed at $4.31 up 7 cents from Thursday.