by Andrew Griffith, Livestock Marketing Specialist
March 28, 2025
FED CATTLE
Fed cattle traded steady on a live basis compared to last week. Prices were mainly $209 to $213 in the South on a live basis. Dressed trade was mainly $335. (limited trade information)
The 5-area weighted average prices thru Thursday were $212.25 live, up $4.27 compared to a week ago and $333.23 dressed, up $3.23 compared to last week. A year ago, prices were $188.10 live and $299.58 dressed.
The past several weeks have been a tug of war between packers and feedlot managers as it relates to negotiated cattle trade. Neither group has much willingness to give an inch until the end of the week when there is no other option but to give an inch. Cattle feeders are aware they are dealing the cards and hold the leverage while packers know they have to get their hands on the limited quantity of cattle that will further tighten in coming months. This is a time of testing for both parties as the reduced quantity of cattle coming to the marketplace will have long lasting impacts on both industries. It may even be as severe as shuttering plants or entities closing entirely.
BEEF CUTOUT
At midday Friday, the Choice cutout was $333.39 down $2.33 from Thursday and up $7.48 from a week ago. The Select cutout was $320.36 up $0.92 from Thursday and up $10.72 from a week ago. The Choice Select spread was $13.03 compared to $16.27 a week ago.
The Choice boxed beef cutout price has increased nearly $22 per hundredweight during the month of March while the Select cutout price has made a similar move to the toon of about $16. This is certainly welcome to packers who are paying nearly $15 more per hundredweight on a live basis for cattle than they were four weeks ago. However, this math does not work to improve packer margins. Summer grilling holidays, baseball parks serving burgers, and a host of other factors work to move beef from April through September with the market really heating up in May. A similar pattern should be evident in 2025 as consumers have turned to protein in recent years. The questions concerning the beef market are not as much about domestic demand as they are about the impacts of tariffs on international trade and how that influences the return on each head purchased. Domestic demand appears to remain strong despite some pundits frequently mentioning pricing consumers out of the market, which is what rationing of a product does.
OUTLOOK
Based on Tennessee weekly auction reports, steer prices this week were $3 to $9 higher compared to last week while heifer prices were $4 to $8 higher than the previous week. Slaughter cow prices were steady to $1 higher compared to a week ago with slaughter bull prices being steady to $2 higher than last week. The calf market remains hot as buyers continue to bid grass cattle prices higher. It is inevitable these prices will finally slow and may even decline moving into the summer months, but there is clearly a strong demand for these lighter weight animals as grass continues to green and put on some leaf. The market should remain strong through most of April before spring and summer grazing operation interest slows. In contrast, feeder cattle futures have bounced around most of the week with no certain direction. The highlight of feeder cattle futures this week is that prices have not made a drastic move in either direction. Feeder cattle futures prices have been on a straight up trajectory since the middle of November. Thus, in four and a half months, feeder cattle futures prices have increased $40 to $50 per hundredweight depending on the contract month. The question now is if this small downturn and failure to establish a direction is just a blip on the radar or if something else is cooking in the market. There have been four or five “blips” on the chart dating back to the middle of November, but those small price declines were all short lived and were soon followed by the market moving higher and to record levels. Producers cannot control the futures market or the cash market, but producers can manage price risk using futures, options, or LRP. The alternative to managing price risk with any of those alternatives is taking on all the price risk or selling the cattle in today’s strong market. It may take a couple of weeks for the futures market to define a direction, but if history is any indicator of future price movements, it will not sit still for long. This means cattle will either increase or decrease in value as they always seem to be doing. It is practically rocket science and brain surgery to make those kinds of statements!
ASK ANDREW, TN THINK TANK
There was a recent question concerning startup costs of different operations in the cattle industry. This is an extremely broad question and not enough space in this article to adequately address it. However, there was another topic of discussion concerning contract grazing cattle, which resulted in marrying the two ideas. Startup of any farm can be an expensive endeavor, and very few farmers or ranchers start where they want to finish. Thus, contract grazing cattle can be a method to get started in the cattle business without having the full capital outlay that would be required if a person wanted to start by owning all the cattle. In essence, if a person owns or rents ground with adequate cattle working facilities and good fences, they could contract graze cattle for a cattle owner and then get paid based on gain or have a fee per head per day. Contract grazing can be set up in several manners, but in this day and time of high cattle prices, it is a method for a person to enter the business without having to purchase the cattle.
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 –April $208.83 -0.73; June $204.85 -0.95; August $201.00 -0.80; Feeder cattle –April $286.93 -0.63; May $285.18 -1.35; August $289.68 -0.98; September $288.48 -0.80; May corn closed at $4.53 up 3 cents from Thursday.