by Andrew Griffith, Livestock Marketing Specialist
July 2, 2026
FED CATTLE
Fed cattle traded $3 lower on a live basis compared to last week. Prices on a live basis was mainly $255 to $256 while dressed prices were mainly $402 to $403.
The 5-area weighted average prices through Wednesday were $255.25 live, down $4.75 from last week and $402.56 dressed, down $5.44 from last week. A year ago, prices were $229.17 live and $369.29 dressed.
As the United States of America celebrates 250 years of being an independent nation, the cattle market continues to trade freely or maybe not so freely in some cases. The decision makers who are trading cattle certainly have the freedom to make purchase and sell decisions as they desire, but buyers and sellers agreeing on a price seems to be difficult when considering trade on a negotiated cash basis. This is one of the reasons formula trade dominates the finished cattle market. There is tremendous expense in negotiated trade of cattle and negotiating trade for approximately 500,000 head per week would be taxing. The current volume of cash trade is sufficient for price discovery and efficient for most players in the game.
BEEF CUTOUT
At midday Thursday, the Choice cutout was $387.65 down $3.61 from Wednesday and down $4.45 from a week ago. The Select cutout was $369.20 down $0.49 from Wednesday and down $3.21 from last week. The Choice Select spread was $18.45 compared to $19.69 a week ago.
As the beef market has already moved past 99 percent of the Independence Day beef purchasing window, wholesale beef prices remain underwhelming to say the least. The summer grilling season typically begins with Memorial Day and ends with Labor Day. This means approximately one third of the summer grilling season is behind the market with only one major holiday weekend ahead of the market. At this point, there is no anticipation for wholesale beef prices to push higher since the market has failed to increase leading into the long Independence Day weekend. To avoid this sounding negative, because beef prices are extremely strong, beef prices have been resilient at this price level. The consumer continues to be willing to pay the current price to keep beef moving, which is a win for the beef industry. As has been said before, there is enough beef on the market given the current price. If energy prices were to soften, there could be some minor support for beef prices, but consumers purchase more than beef.
OUTLOOK
Due to the Independence Day holiday most Tennessee weekly auction markets were closed for business this week, and if any of them did have a sale then they were not reported via Market News reports. This does not mean the market did not provide valuable information this week as there was limited trade of feeder cattle across the country. The CME Feeder Cattle index value, which represents an 800 pound steer in a 12-state region west of the Mississippi River, traded as high as $381.86 per hundredweight on June 24th. This value was a $20 per hundredweight increase in eight days. The index value has lost about $10 over the last eight days. This cash price action demonstrates there is nearly as much price volatility in the cash market as in the futures market. However, the storyline between the cash market and the futures market is the positive basis of the cash market. In other words, the CME Feeder Cattle index value is several dollars higher than the cash price. For instance, as of this writing the CME Feeder Cattle index value was approximately $10 per hundredweight higher than the August feeder cattle futures contract price. This means the actual participants in the cattle market think cattle are more valuable than those trading futures contracts as the futures contract price is dominated by traders and not hedgers. The benefit of this positive basis is for those who are physically marketing cattle. Producers selling cattle today are being paid more than the futures market is suggesting they will be worth in the future. However, there is also a challenge with this situation. Producers who plan to sell cattle several weeks down the road or even months down the road may find it difficult to successfully manage price risk with futures, options and LRP. Options and LRP are certainly more appetizing than selling the futures contract as basis is expected to converge. Futures increasing with no increase in the cash market would result in a loss from the hedge. Cash prices can decline to the futures and there is no benefit from the hedge.
ASK ANDREW, TN THINK TANK
Should I precondition my cattle or sell them straight off the cow? This is a question that will be asked by several producers in the next few months as the spring calf crop is being weaned. Some producers will put little or no thought into this question and either sell the cattle on the day of weaning or put them in the weaning pen for a 60 plus day preconditioning program. Others will actually debate this question and the answer is not as easy as some make it out to be. In order to ask this question, land, labor and capital resources must be available to precondition cattle. If these are available then the next step is determining the expected cost versus the expected added revenue. If the revenue is expected to exceed the cost then weighing the risk is the next move. This is a little more difficult, but a quick example may help. Assume a producer has calculated they can make $100 per head preconditioning calves. With calf values near $2,500 per head, the loss of one calf out of 25 calves (4% death loss) wipes out all profits.
Please send questions and comments to agriff14@utk.edu.
FRIDAY’S FUTURES MARKET CLOSING PRICES
Thursday’s closing prices were as follows: Live/fed cattle –August $239.23 -2.60; October $234.30 -2.43; December $234.23 -3.73; Feeder cattle –August $360.63 -3.53; September $358.48 -3.70 October $355.58 -3.73; November $352.48 -3.80; July corn closed at $4.25 up 4 cents from Wednesday.