Latest / Professional Ag Marketing Podcast / Cattle Market Pulse | Cattle Talk February 13th, 2026

Transcript

Cattle Market Pulse | Cattle Talk February 13th, 2026 · Professional Ag Marketing Podcast

• 0:02
  SPEAKER_00: Welcome to the Cattle Talk Podcast.
• 0:05
  SPEAKER_00: Your weekly breakdown of cattle market fundamentals, key news, and the insights shaping the industry.
• 0:12
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:20
  SPEAKER_02: All right, today is Friday the 13th.
• 0:22
  SPEAKER_02: How's it going, Jace?
• 0:23
  SPEAKER_02: It's going good, Mike.
• 0:25
  SPEAKER_02: Let's talk cattle today.
• 0:26
  SPEAKER_02: Just on the agenda to get started, a few things we're going to talk about here.
• 0:30
  SPEAKER_02: We're going to start with uh some cattle slaughter, cutout, cash.
• 0:34
  SPEAKER_02: Uh, we're going to talk about futures chart here a little bit, see what we're showing there.
• 0:38
  SPEAKER_02: And then uh yeah, I just want to talk about a few things with packer margins, uh, then break into a cow calf discussion at the end of this because it's very, very important.
• 0:48
  SPEAKER_02: We cover that in this podcast today.
• 0:50
  SPEAKER_02: It's some exciting stuff that you really should be looking at.
• 0:53
  SPEAKER_02: So let's talk about what you're seeing on the supply side, Jace.
• 0:58
  SPEAKER_01: Yeah, so what we're we're seeing on the harvest side is about eight percent less last week again, so we're running consistently six to eight percent below year-ago numbers again for another year in a row here.
• 1:13
  SPEAKER_01: Um it's that's equating to about six percent less beef production, and that's due to about a three percent weight increase, but supply is still not there.
• 1:25
  SPEAKER_02: Interesting, and it doesn't look like it's changing either, does it?
• 1:28
  SPEAKER_02: No, it's not looking forward.
• 1:30
  SPEAKER_02: On um on the weight side, what can you tell me currently about you you said that's making up for a little bit of it.
• 1:38
  SPEAKER_02: Are we still running pretty heavy?
• 1:39
  SPEAKER_01: Yeah, we are.
• 1:40
  SPEAKER_01: So we're running like 981 pound carcass on the steers, so that's that's yeah, 3% weight increase from last year of around 950.
• 1:50
  SPEAKER_01: So you're getting to the point where I mean they're they're getting big.
• 1:55
  SPEAKER_02: What can you tell me about the season we're in looking forward with the numbers available to us on the cattle side?
• 2:02
  SPEAKER_01: Yeah, so it like that that was kind of my cash discussion a little bit too.
• 2:07
  SPEAKER_01: Is last year we saw a drop in cash right about now.
• 2:12
  SPEAKER_01: Um, cash started to head lower about the first of February and headed lower for about a month and a half there.
• 2:19
  SPEAKER_01: Whereas this year we're still climbing, and I think that's just a product of us pushing them back a little bit further.
• 2:26
  SPEAKER_01: We've got the we're just heavier cattle again.
• 2:28
  SPEAKER_01: You know, if you add if you add 30 more pounds, you probably added 10 more days, 20 more days there.
• 2:35
  SPEAKER_02: So can you pull up a weight chart as well from Pro Like Power there?
• 2:39
  SPEAKER_02: Wow, look at that.
• 2:41
  SPEAKER_02: It is trending a little bit lower though, isn't it?
• 2:44
  SPEAKER_02: Yes, sir.
• 2:45
  SPEAKER_01: We'll see.
• 2:46
  SPEAKER_01: Seasonally it should head a little lower here, stall out through the spring, and then head a little lower again in the summer when you deal with a bit of the heat.
• 2:55
  SPEAKER_02: Interesting.
• 2:56
  SPEAKER_02: Uh what else can you tell me about the supply side before we start talk about some demand?
• 3:00
  SPEAKER_01: Cash this week is at like 244 was the last I've seen.
• 3:06
  SPEAKER_01: It continues to roll in this afternoon, but um still not a lot of supply ready to go to town right now.
• 3:14
  SPEAKER_01: Um, I mean, kills down eight percent, and they're still paying up for for cash.
• 3:20
  SPEAKER_01: So it's the the supply side kind of tells its own story there in the in the cash side, but very very strong.
• 3:26
  unknown: Yeah.
• 3:27
  SPEAKER_02: One of the things I want to use to kind of break into the next discussion was on the Packer side, we saw some news this week out of Cargill, didn't we?
• 3:35
  SPEAKER_01: Yeah, so that was just a that's a secondary plant there.
• 3:40
  SPEAKER_01: It's ground beef.
• 3:41
  SPEAKER_01: They hauled trimmings up there, make ground beef, and I think that was more of just an efficiency thing from Cargill.
• 3:47
  SPEAKER_01: I don't know that there's any too big of a story there.
• 3:50
  SPEAKER_01: It was just kind of inefficient.
• 3:52
  SPEAKER_02: That's gonna be something to watch going forward because how many more plants would we have to close on just the kill side to really make a difference in this cash cattle price?
• 4:02
  SPEAKER_02: What would give the packers leverage?
• 4:03
  SPEAKER_02: Because they're already running.
• 4:05
  SPEAKER_02: You pick the number 70, 75% of capacity.
• 4:08
  SPEAKER_02: It does it really only take one more packing plant shutdown of a major one to really push leverage back to the packer?
• 4:16
  SPEAKER_01: I think it does, yeah.
• 4:18
  SPEAKER_01: And I don't I don't think that gets us to 2016 sort of levels of Packer leverage, but I it it significantly reduces our leverage if one major goes down.
• 4:28
  SPEAKER_01: Well, what do Packer margins look like right now, Jace?
• 4:31
  SPEAKER_01: So the Packers probably losing 250 bucks to 325 ahead right now.
• 4:38
  SPEAKER_01: A lot.
• 4:38
  SPEAKER_01: So a lot.
• 4:39
  SPEAKER_01: A lot.
• 4:40
  SPEAKER_01: And for the year average so far, it's been incredibly painful, hasn't it?
• 4:44
  SPEAKER_01: Yeah, it has.
• 4:45
  SPEAKER_01: So yeah, the the Packers, the Packers have been consistently losing leverage since the height of their run in 2021.
• 4:53
  SPEAKER_01: But it's it's getting it's getting to a point where it's it that's gonna matter.
• 4:58
  SPEAKER_01: For sure.
• 4:59
  SPEAKER_01: For sure.
• 5:00
  SPEAKER_02: What can you tell me about the cattle that you're buying and placing right now?
• 5:06
  SPEAKER_02: Uh what can you tell me about the opportunities out there?
• 5:09
  SPEAKER_01: Yeah, so I guess we're still dealing with placing cattle that don't make money.
• 5:13
  SPEAKER_01: So I I've seen a lot now that are coming in with a 240 break even for August and October.
• 5:20
  SPEAKER_01: Um that's figuring a heavier weight.
• 5:22
  SPEAKER_01: So when we look at when we look at placement, um the the profitability on placement of these calves, normal for this time of year would be like if you just used 1,500 pounds on a steer, which would have been normal a couple years ago, you would have had a five to ten dollar winner when you placed these cattle.
• 5:44
  SPEAKER_01: That would have been pretty standard.
• 5:45
  SPEAKER_01: This year it's negative twenty.
• 5:47
  SPEAKER_01: So if you're if you're not adjusting for a heavier weight, if you're just taking the same animal, you're looking at a$300 ahead loss versus what you would have been even two years ago.
• 6:00
  SPEAKER_01: Interesting.
• 6:01
  SPEAKER_01: Interesting so those those two combined are tell a big story on the situation we're in right now with right sizing the infrastructure from the after after the feeder calf gets placed and the and the slaughter capacity.
• 6:17
  SPEAKER_02: So tell me about the the margin that's in this thing per calf.
• 6:25
  SPEAKER_01: So from the beginning, from a calf being born to selling it to a retailer, um, you're looking at about eleven hundred dollars a head of profit to be made in that space.
• 6:37
  SPEAKER_01: Does that waver much day to day?
• 6:39
  SPEAKER_01: That's pretty consistent, isn't it?
• 6:40
  SPEAKER_01: That eleven hundred.
• 6:41
  SPEAKER_01: It's pretty consistent.
• 6:42
  SPEAKER_01: That's that's high when you when you look at over the past years, you know, it that that number's really high.
• 6:49
  SPEAKER_01: But of that eleven hundred dollars, the cow guy's making sixteen hundred of it.
• 6:54
  SPEAKER_02: So So rephrase that eleven hundred dollars available of profit per animal.
• 7:01
  SPEAKER_02: And the cow calf guy is getting sixteen hundred of that.
• 7:04
  SPEAKER_01: Yeah, so that's being subsidized by both the feedlot taking risk on the on the board going up, they're buying.
• 7:11
  SPEAKER_01: And that would be what fifty, hundred bucks?
• 7:15
  SPEAKER_01: Probably a little more than that,$150, maybe even.
• 7:18
  SPEAKER_01: And then the Packer with$250 to$300 there that that they're taking as a loss.
• 7:26
  SPEAKER_01: So they're taking the losses for the CalCAF guy.
• 7:29
  SPEAKER_02: So when you say right sizing the infrastructure, it really would appear that that margin is gonna try to get pulled away from the CalCAF guy back into making this a little bit more beneficial and sustainable on the packing side and the feedlot.
• 7:48
  SPEAKER_01: Right.
• 7:48
  SPEAKER_01: Nobody wants to lose money forever.
• 7:50
  SPEAKER_01: So I mean there will be people that quit feeding cattle.
• 7:54
  SPEAKER_01: There will be people that quit killing cattle, and you know, the Mexican border would provide a little relief to both of those two, but it it's still I still think there there needs to be some infrastructure resizing, just reduction in feedlot capacity and reduction in kill capacity.
• 8:13
  SPEAKER_02: And it is worth noting that the two hundred and some dollars being lost at the packer level is being subsidized a little bit based on the other sectors of their business uh that's making money currently, isn't it, Jace?
• 8:26
  SPEAKER_02: Yeah, they're all pretty diversified.
• 8:28
  SPEAKER_02: That definitely helps.
• 8:30
  SPEAKER_02: Where do you want to wrap up this week?
• 8:31
  SPEAKER_02: I know we didn't talk much about the demand side.
• 8:33
  SPEAKER_02: I just had a couple quick notes uh when it comes to the demand side.
• 8:37
  SPEAKER_02: We had a report come out earlier this morning, showed that inflation cooled a little bit more than expected in January.
• 8:43
  SPEAKER_02: They came in about 2.4% on an annual basis, so only a 2.4% higher level than last January, they were expecting 3 or higher.
• 8:54
  SPEAKER_02: So, in the grand scheme of things, Jace, if you were thinking about the uh the idea of cutting rates through 2026, that is a little bit easier now.
• 9:04
  SPEAKER_02: If inflation is lower at 2%, that's very close to their targeted 2% that they normally are, and it's not sticky at 3 or higher, that gives us the ability to say, all right, inflation's under control, we can cut rates now a little bit more aggressively.
• 9:18
  SPEAKER_02: So we've we've seen the stock market act a little bit nicer today after that news going into the weekend.
• 9:24
  SPEAKER_02: It's been super choppy lately, but uh a few things on just the outside markets I thought that were interesting.
• 9:30
  SPEAKER_02: But definitely this fear of uh fear of big moves in this stock market, mainly due to the tech sector, has continued to shake these equities in a pretty violent way.
• 9:43
  SPEAKER_02: And that always gets scary for both outside markets and for um and for the cattle market.
• 9:48
  SPEAKER_02: It's been tied very closely to the SP 500 here, especially as of late.
• 9:53
  SPEAKER_02: The the big down days we have in the equities, it seems like cattle uh are right alongside of it uh one way or another.
• 10:00
  SPEAKER_02: Yeah, so I thought that was interesting, kind of finishing out our week on on uh the outside markets and equities.
• 10:06
  SPEAKER_02: Um any other comments on demand that you'd like to say?
• 10:10
  SPEAKER_01: No, I guess I guess you could go listening to Cattle Facts at the Cattle Con in Nashville there, their their take on it was that our demand is not not necessarily gonna go away, but we're probably running into headwinds on that front.
• 10:27
  SPEAKER_01: You know, you've got cheaper proteins, you've got pork, you've got chicken, and it's gonna it's gonna struggle to appreciate from these things.
• 10:34
  SPEAKER_02: Can you pull up the choice cutout there, uh, Cade, just off uh Pearl Egg Power.
• 10:39
  SPEAKER_02: I just wanted to show something about the recent trajectory that we've seen out of the choice.
• 10:45
  SPEAKER_02: We dip pretty hard here for a little bit, at least uh if you look back at last year, towards about the beginning of March, and then we're off to the races again.
• 10:53
  SPEAKER_02: So by about the early part of March, I really want to see how strong of an uptrend we have going in this choice cutout because we are elevated quite well versus last year's levels, let alone history.
• 11:07
  SPEAKER_02: I want to see if we can keep that spread, Jace.
• 11:10
  SPEAKER_01: Yeah, we are we are gonna all be watching that very closely.
• 11:14
  SPEAKER_02: Because I mean, if that doesn't start to appreciate, we're gonna we're gonna we've seen that in a hog market the last couple years where we wait for that seasonal appreciation through the summer and we just can't quite get it.
• 11:25
  SPEAKER_02: Last year I think we did, but the year prior we definitely didn't.
• 11:28
  SPEAKER_02: So something interesting to watch there.
• 11:30
  SPEAKER_02: Yeah, definitely a higher possibility.
• 11:31
  SPEAKER_02: You do any pull-ups with RFK when you're in National?
• 11:34
  SPEAKER_02: No, no, didn't get a chance to no I see yeah, interesting times.
• 11:38
  SPEAKER_02: It's always it's cool that he was the one that reached out to go to Catalcon.
• 11:42
  SPEAKER_02: They didn't reach out to him.
• 11:44
  SPEAKER_01: Yeah, that was that was awesome, and that was an awesome showing from from their team on what they're what they're doing with the food pyramid and the importance of proteins and stuff we knew.
• 11:54
  SPEAKER_02: He said, we'll we'll keep demand high, we'll push it.
• 11:57
  SPEAKER_02: We want people to eat beef, but you gotta get prices down.
• 12:00
  SPEAKER_02: So he told all of you to to increase production, Jace, which wasn't the most bullish.
• 12:06
  SPEAKER_02: But all right.
• 12:07
  SPEAKER_02: Well, thank you for your time today.
• 12:08
  SPEAKER_02: I appreciate it.
• 12:09
  SPEAKER_02: Uh thank you for everyone.
• 12:11
  SPEAKER_02: Remember, three day weekend at this weekend.
• 12:13
  SPEAKER_02: No markets on Monday.
• 12:14
  SPEAKER_02: We'll be back Tuesday.
• 12:16
  SPEAKER_02: Thanks, Jace.
• 12:16
  SPEAKER_01: Thanks, Mike.