by Andrew Griffith, Livestock Marketing Specialist
February 6, 2026
FED CATTLE
Fed cattle traded $3 higher this week compared to a week ago on a live basis. Prices on a live basis were mainly $238 to $243 while dressed prices were mainly $378.
The 5-area weighted average prices thru Thursday were $239.91 live, up $3.17 compared to a week ago and $378.00 dressed up $7.18 compared to last week. A year ago, prices were $207.11 live and $327.19 dressed.
The one-sided tug-of-war continues between cattle feeders and packers. It is not completely one-sided, but it sure feels that way as packers are slobbering at the mouth to purchase cattle that will be a loss. This sure feels like further consolidation in the packing industry is in store, because these types of losses can only be sustained for so long. The packing industry certainly has deep pockets as many of them are diversified across the meat proteins, but that does not make it acceptable for one portion of the business to lose money. Cattle feeders will continue to hold cattle for higher prices, which is something they have to do when they continue to pay higher prices for feeder cattle being placed in today’s market.
BEEF CUTOUT
At midday Friday, the Choice cutout was $369.91 up $2.66 from Thursday and up $3.47 from a week ago. The Select cutout was $363.85 up $3.48 from Thursday and up $0.85 from last week. The Choice Select spread was $6.06 compared to $3.44 a three weeks ago.
Simple math can go a long way in any business, and it is no different in the cattle business. If packers are paying $378 per hundredweight on a dressed basis for cattle and the carcass is 950 pounds then the total purchase cost is $3,591 per head. For a round figure, packers are receiving $370 per hundredweight based on the Choice cutout, which is $3,515 per head. This means packers are buying a $76 per head loss before they do anything to the animal on a meat basis. There is certainly value in the drop credit, but this means cattle slaughter is a loss for packers. Given this information, the news reports of union workers at the JBS facility in Greeley, Colorado voting to strike this week is probably a welcome sign for JBS officials! That is said tongue in cheek to some degree, but reducing costs by not losing money on each animal and not paying labor may be the winning formula when losses continue to mount. JBS and union workers will certainly work to come to an agreement, but one side may be slower than the other from a business standpoint.
OUTLOOK
Once again, there are no trends to share this week as winter weather had many markets closed two weeks ago and very few cattle moving this week. The two-week trend of few cattle trading in Tennessee is unlikely to persist into next week as weather conditions are forecast to change substantially beginning Sunday as warmer temperatures and only a small probability of precipitation is expected. The expectation is for cattle prices to continue increasing for lightweight calves, because feeder cattle futures have spent the past two weeks trending higher. Cow-calf producers are experiencing what could be considered windfall profits, but these types of returns are likely to persist for a few more years simply due to the cattle supply. The January 1, 2026 cattle inventory report was released last Friday, and the beef cow herd estimate totaled 27.61 million head. This estimated beef cow inventory represents a decline of 284,800 head from the previous year, which is a one percent decline year-over-year. The quantity of heifers held for beef cow replacement was estimated at 4.71 million head, which is an increase of 41,700 head compared to a year ago. This does demonstrate some producers have a desire, a willingness, and possibly the means to grow the beef cattle breeding herd. There are certainly some states/regions attempting to grow the beef cattle herd, but the Southeast United States is not one of them at this point in the game. As an individual thinks through this report, the supply implications should be forefront in that from a biological standpoint, the likelihood of increasing beef production over the next three years is slim. This means everyone in the industry will be taking on increased financial risk in the cattle business if they purchase any animal. The margin operators are who are taking the brunt of the financial risk today, but anyone retaining heifers to breed or anyone purchasing females will be paying historically high prices for those animals, which means more capital is at risk.
ASK ANDREW, TN THINK TANK
This week has been all about the value of bred heifers. Questions have been asked via email and at programs across the state. The questions primarily focus on what a bred heifer is worth, what a person can afford to pay for a bred heifer, what the expected profits are over her reproductive life, and anything else that falls in the category of financial considerations. The answer to these questions varies based on what a person is trying to achieve and what their specific situation is. For instance, what a person can pay for a bred heifer versus retaining and breeding their own heifers has one value versus a person who is looking to grow the cow herd or start a cow herd. In fact, some producers should not even be considering breeding females while the most profitable decision for others may be to have a cow-calf operation. Using some back of the feed sack math, most operations will fall in the category of being able to pay between $3,700 and $4,800 for a bred heifer. However, it is important an operator do some figuring before investing.
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 $237.75 +2.50; April $237.25 +1.65; June $233.85 +1.65; Feeder cattle –March $367.43 +3.35; April $362.80 +2.30; May $357.13 +0.93; August $355.98 +0.95; March corn closed at $4.30 down 5 cents from Thursday.