Latest / CattleUSA Daily / 237: The Big 2026 Cattle Market Wildcards: Border, Beef Demand, and Placements with Dan and Samantha

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237: The Big 2026 Cattle Market Wildcards: Border, Beef Demand, and Placements with Dan and Samantha · CattleUSA Daily

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In today's episode with Dan and Samantha, we are breaking down
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the first cattle market discussion of the New year.
0:07
They are discussing everything that we have seen over the past
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week, in that week and a half. We are also breaking down some
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hot topic discussions, everything from the southern
0:16
border to beef prices to demand to retention to everything else.
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We kind of hit on a lot of those things and then what we can
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anticipate and expect as we go into the next few months of the
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year. Dan said it perfectly, we have
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historically not seeing great things happen in the cattle
0:34
market in years that end with a six.
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So what are our thoughts as we go into 2026?
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You can find all of that in two days episode.
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But before we hop in, if you could take a second, if you're
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watching on YouTube, make sure you hit that subscribe button
0:46
and like this episode. If you're watching on any of our
0:49
other podcast platforms, take a second to go rate and review
0:52
this show as well. Without further ado, let's go
0:55
ahead and hear from Dan and Samantha.
1:00
Welcome to the Cattle USA Daily podcast, your go to source for
1:04
the latest livestock markets, industry insights and the
1:07
updates shaping agriculture today.
1:09
I'm your host, Lauren Moylan, a passionate advocate for
1:12
agriculture here to keep you informed and connected.
1:15
Now let's dive into today's episode.
1:24
Dan, Samantha, welcome back to the podcast.
1:26
Happy New Year. This is our first recording of
1:29
the new year. How was your guys's New Year's,
1:33
your past weeks, all the things? Go ahead, Samantha.
1:37
It was good, it was good. I was up for the new year, but
1:41
not for the reasons that probably everyone else was
1:44
feeding the baby every two hours.
1:45
So a little bit different this year.
1:48
Dan, how about you guys? It was great.
1:50
Had a family Christmas over New Year's so life was easy.
1:54
Got to have prime rib that very first day of the year, so we
1:57
started out the year well. Are you guys cabbage and Black
2:01
Eyed Peas people? I know you're on New Year's Day.
2:03
Have you guys never heard of that?
2:05
This sounds like another air frying steak deal.
2:08
No, I promise it's not OK. This is the thing my dad does
2:12
and I don't know what it came from, who started it, what
2:17
culture started all of these things.
2:19
You're supposed to eat cabbage and Black Eyed Peas on New
2:22
Year's Day for good luck. I don't do it, but my dad does
2:26
it. He does cabbage on New Year's
2:28
Day with Black Eyed Peas and typically will do like a roast
2:32
beef or something and have cabbage and Black Eyed Peas.
2:36
I swear this is a real thing. I swear I'm not alone on this.
2:40
This is an actual legit thing. I don't do it but it's legit.
2:43
OK, All right, I trust. You that so I have better luck
2:47
a. New one, yeah.
2:49
I I can say I did not do the cabbage and Black Eyed Peas on
2:52
New Year's Day and I did not even stay up till midnight.
2:55
I think I was in bed by 8:30 or 9, so probably asleep an hour
3:00
later. What about you, Dan?
3:02
What'd you do on New Year's? Sat on the farm work and I think
3:07
I was probably asleep by 9 O clock that night and yeah life
3:11
was great. Yeah.
3:14
Yeah, that that party and that night, it's for rookies.
3:17
The three of us lived really exhilarating lives on New Year's
3:21
Eve, but I wouldn't have had it any other way.
3:24
I think, Samantha, you'd take the cake on this one, though,
3:26
with you were still up just, you know, not for the reasons you
3:32
wanted to be. So, yeah, well, guys, how are
3:37
the markets doing in the new year?
3:39
What is the update on what we've been seeing over the past week
3:42
and 1/2? A lot of fun going in the right
3:45
direction. Everybody wanted to bounce back
3:47
and they got it. Got to love that Santa Claus
3:49
rally leading us right into the New Year's and here we are.
3:52
Barns are rocking, cash got that bounce, like I said, going into
3:56
Christmas and New Year's and here we are.
3:59
It's been fun. Absolutely not really seeing a
4:03
lot in your negotiated cash trade through the first part of
4:07
this week anyways. But like Dan said, we're holding
4:09
steady. I see that picking up into the
4:12
later part of this week. You know these Packers, they're
4:15
so short on inventory following two week, two weeks, the light
4:18
holiday training. So cash trade on fat cattle last
4:21
week came in at 33,000 head on a negotiated live basis tick
4:26
higher than the week prior, but still almost you know, 35,000
4:29
head under a year ago trade last week range from 2/27, 2:34.
4:34
You know, since that Mexico border has been closed,
4:36
placements have been way down in the Southern Plains.
4:39
So with the inventory they do have, we're starting to see them
4:42
pulled out for those higher bids.
4:43
I first see that carrying into this week anyways.
4:46
So I really the Fed kind of market as a whole, we're seeing
4:49
it become, you know, so incredibly non competitive and
4:52
that window of price discovery, it's just getting so small,
4:55
especially through these USDA reports men.
4:57
We're just seeing more and more of it, especially after Texas
5:00
got pulled from the mandatory price reporting, seeing a lack
5:03
of transparency. Really the reason I bring that
5:06
up today is because last week, you know, we saw the southern
5:09
Plains was offering those 232 bids was offered the 32 to 234
5:13
bids late and last week a lot of the speed lots held out for 234
5:17
into the weekend. But Packers recorded those
5:19
prices at that 232 + 1 and 232 + 2.
5:23
The reason for that, you know, weighted average from your
5:26
negotiated cash trade on fed cattle sets that base price for
5:29
formula trades on those forward contracts.
5:32
So by reporting those lower base numbers followed by that plus 1
5:35
+ 2, whatever, they're manipulating that weighted
5:38
average to keep from bumping up the base price on formula trade.
5:41
So, you know, they spend some more money on the front end, but
5:44
they're saving millions on those formula trades.
5:46
And you know, it's just not really a fair market, very
5:50
little price discovery. But I just wanted to give you
5:52
guys a little bit of Intel because we aren't, we aren't
5:54
seeing that transparency from the USDA report.
5:57
So I'm sure everyone's heard by now we've got another reported
6:01
case of screwworm South of the border and at this time located
6:05
in a calf 200 miles South of Texas.
6:08
So chances are, you know, we see that reopening continue to be
6:12
pushed further off, probably see some more confirmed cases to
6:15
follow. But like Dan said, we're going
6:18
to wrap rally. I'm pretty bullish in this
6:20
cattle market, especially as we do start to see till we start to
6:24
see a reflection of heifer retention.
6:26
So pretty, pretty bullish. Dan, Are you ready for the
6:29
government to shut back down again so that we're not getting
6:31
any more USDA reports? Yeah, Honestly, they haven't,
6:35
Yeah. They haven't really done a lot
6:36
to hold the cattle market back here lately.
6:40
I mean, they really can't. We haven't placed any cattle.
6:42
I mean, it's a lot of those calves were moved early this,
6:46
this fall price was great there end of end of August, early
6:50
September, a lot of producers moved those calves lighter and
6:53
earlier though it's, it's hard for me to get nervous from the
6:59
standpoint there are fewer cattle to place.
7:02
Now Keep in mind, the old saying in the cattle business is you
7:05
will run out of money before you run out of cattle.
7:08
And I think we're living part of that right now.
7:11
I mean, you watch the sale barn prices, you know, you got 9
7:13
weights back in the three 50s already.
7:15
You got that index jump and you know, it's already back in the
7:18
three 50s after we're taking a pretty deep dip.
7:21
You know, I think we ended up down in what was our load down
7:25
there in the three piece, I think no 318.
7:28
So you ran that index up from three sixties 370 down to 318
7:33
and then bring it back to three 52353 here reported and and I
7:38
wouldn't be surprised if that jumps here by the end of the
7:40
week. So yeah, I, I don't think the
7:43
USDA can can force really high placements compared to last
7:48
year. Obviously as we go into 2026,
7:51
those placements are going to be reflected against the 2025
7:54
placements. So keep that in mind that even
7:58
if we are placing fewer cattle, last year was also big time down
8:02
on placements in those same months if we're talking, you
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know, especially if when the closer we get to summer.
8:08
So that's a big thing with me. We're always comparing to last
8:11
year. Last year was down so hard.
8:13
So we might not see lower placements the deeper we get
8:17
into 2026. But here for the next two, 3-4
8:19
months, I would expect placements to be really on the
8:22
lighter side. But yeah, shut her down.
8:25
Let's get it over with. Samantha, what are your thoughts
8:27
on placements? Yeah, I agree.
8:30
You know we can't just pull cattle out of thin air and we're
8:33
just so short on cattle. I think we're going to get into
8:35
our shortest supplies come this spring and we're short on
8:39
placements and like I said, I foresee that continuing to
8:43
follow into later this year. Anyways, like I said till we
8:46
till we start to see how her attention reflect and up those
8:49
numbers. Yeah, absolutely.
8:51
So for producers looking out for the rest of spring, the rest of
8:54
this month, what are kind of your guys's thoughts as we go
8:57
into the next few months and start really battling winter
9:01
across the United States? Thinks I need to be cognizant of
9:05
where the market has rallied back to.
9:08
You know, yesterday I was talking to a guy and I ran back.
9:10
I ran and ran the numbers. We have only ever seen the
9:14
feeder cattle index get above 350 for 59 days ever in history.
9:19
So obviously that was all in 2025 and we're starting to pop
9:23
back right here in the beginning of 26.
9:25
But 59 days in history, have we ever been above 350 on the
9:30
index? Bring that back to your LRPS.
9:33
The index is what settles those LRPS.
9:36
So that cow calf producer needs to be cognizant, hey, we're
9:39
knocking on those three 50s. I mean, you can ensure 35039
9:43
yesterday on that, on that November price for LRP on
9:47
unborn, you know, it, it goes, everything goes back against
9:51
that feeder cattle index. But step out there, do those
9:53
unborn cabs, do those light cabs, do those yearlings do them
9:56
all? Because any year that has ever
9:58
ended in a six has never been friendly for the cattle market.
10:01
So let's let's step out into that full time frame.
10:04
Like I mentioned, we could start having steady placements come
10:08
this summer, come this fall. Obviously, I'm still in the camp
10:11
this spring. You know, we're going to have
10:13
lighter placements. I've talked to a lot of vets.
10:17
Sounds like there's some heifer retention going on.
10:19
So I think that's also part of why we're seeing these calf
10:23
prices so high in the sail barns as you're seeing guys holding
10:26
back. So there's even fewer calves
10:28
because of that. So I love the optimism.
10:31
I'm glad people are doing it long term, having more cows.
10:34
It is obviously not the wild, you know, the most bullish thing
10:38
in the world. But at the same time, we've
10:41
brought a lot of wealth back to rural America.
10:43
We're bringing a lot. You know, if the markets stay
10:45
good like this, if demand stays good, we could see this cow herd
10:50
increase. And it's not the end of the
10:51
world. Do I think we're going to go
10:53
right back to 30 million beef cows now?
10:55
But, you know, it wouldn't hurt to go to 28 million.
10:59
So I'm glad to see it. Like I said, that 350, we
11:03
haven't spent much time up there.
11:04
I think we need to protect that going all the way out next
11:06
winter. Absolutely, Samantha, what are
11:08
your thoughts? Yeah, I agree.
11:10
I mean like we we pounded try to pound and people said protect on
11:14
the Rapids. And you know, I want to touch on
11:16
something here quick that I hear people say so much.
11:20
Well, I tried LRP and it didn't work for me.
11:22
Well, probably because they didn't get identified, right?
11:25
But what a person has to remember, you know, this is
11:27
still an insurance product. And like any other insurance
11:30
product, you don't want to have a claim.
11:32
I mean, you want to be able to take advantage of those higher
11:35
markets. If they do rally.
11:36
It's completely a safety net. If and if things do fall, you
11:39
know, you're going to be thinking yourself that you had
11:41
that protection on. So for me, Dan, all of us here
11:45
at Catalia USA Insurance, we had the same goal for your guys's
11:49
operation that we have for our own, you know, be profitable, be
11:52
successful, be sustainable, pass it on to the next generation.
11:56
And at the end of the day, you could be doing everything right.
11:59
But the market's either your biggest asset or your biggest
12:02
enemy. And LRP helps give you that
12:04
opportunity to market your cattle either to your advantage
12:07
and use that market to your advantage or indemnify you if we
12:10
do go down. So just keep that in mind when
12:13
you're protected on these prices.
12:16
Yeah, absolutely. Dan, what are grain markets
12:19
doing right now? A lot of nothing.
12:21
Got a nice little bounce here the last couple days, but yeah,
12:25
a whole lot of nothing. You got a big grain report
12:26
coming out Monday, so all eyes on that.
12:29
I think ever since October, we were waiting for this January
12:33
report just to see the USDA hopefully lower the yield
12:37
accurately, especially here in the state of Iowa, we've been
12:41
the big elephant in the room. So hopefully they come in, they
12:44
report that at number accurately.
12:46
I also wouldn't be surprised if they, you know, I think I've
12:49
said it before, lower that feed and residual number.
12:51
You know, you can't have fewer birds, fewer hogs, fewer cattle
12:56
all on feed and still be using the same amount of corn.
12:59
So to me, they need to lower that.
13:01
They've needed to lower that for the last two years and, and they
13:05
did on the last report. I think they lowered a little
13:07
bit more this time. Overall, I'm hoping we really,
13:12
really found a bottom there few days ago, last week.
13:15
You know, it'd be nice if we could get a little life under
13:17
that wheat market to help sustain a rally in the corn and
13:20
bean market. But I'm yeah, overall hasn't
13:23
done a lot. She's been kind of stagnant and
13:25
sideways. So if we get that rally coming
13:28
into next week and and into Jan, Feb, I think, you know, for the
13:33
grain farmers or the guys that farm a little on the side, I
13:35
think they need to use that rally to start protecting 2026
13:38
crop. So yeah, once you get past this,
13:40
this January report, a lot of people forget about the old
13:43
crop. It's in the bin.
13:44
We can move on. You know, you start trading
13:46
bases and carry on that and all eyes start looking towards that
13:50
2026 crop. So how many acres will we have?
13:53
Where's trendline yield? What are we doing with it?
13:56
It's you need to be cognizant once again of 2026, you know,
14:01
December 26 is, is getting close to that 470 number.
14:06
I think we need to start looking at protecting that.
14:08
So on the feed side, I'd, you know, realistically that you can
14:12
play in the mail a little bit, but I don't think as of right
14:16
now it doesn't look like we're going to see a lot of upside
14:19
pressure, you know, towards that 5 bucks or above.
14:21
So I think just use the basis opportunities to get feed needs
14:27
bought here for the rest of the winter cases market.
14:30
We've had a lot of fog up here in Iowa.
14:32
So I would assume we're going to have a very, very late winter
14:35
and it's going to be brutal, but we'll see, get those feed needs
14:38
bought. Yeah, I feel like this is kind
14:41
of the concept of beating a dead horse at this point.
14:43
But as far as the southern border goes, I think it's still
14:46
very relevant within the cattle market and how it's going to
14:50
affect us as we go into 2026. I felt like the entire time
14:53
through 2025, it was like we're just pushing it off, We're
14:56
pushing it off further. We're just rolling the can down
14:58
the road and we'll deal with it later type of situation.
15:01
And we're continuing to see that in 2026, we've seen some more
15:04
confirmed cases of screw worm. So that reopening of the border
15:07
is going to continue to get pushed as we go into 2026.
15:10
What are your guys kind of thoughts on how that's affecting
15:12
the market right now and how that's going to continue to
15:15
affect the market as we go into the rest of the year as well?
15:18
You know, I mean it is a port by port reopening.
15:20
So obviously we're not going to see mass imports of cattle right
15:24
off the bat. We talked a little bit about
15:26
placements, especially down there in the South.
15:28
Placements are so down. They're not going to make the
15:31
South is not getting aggressive in the market at all.
15:32
They're waiting on this cattle to come across.
15:34
So as far as that goes, I could see a little bit of a bearish
15:38
trend. But like I said, we're still so
15:40
short of cattle even with those cattle from the South.
15:43
So I don't see it affecting the market drastically.
15:46
I think just the talk of of it, Rio affected it more than
15:50
probably just ripping the Band-Aid off will.
15:52
I want to see the weights they bring across because they some
15:56
of those cattle have had to go into feed yards down in Mexico,
15:59
but not all of them. So it's pretty common to ship in
16:01
4567 weight cattle. I want to see when they open
16:06
that are we going to be shipping in 789 weights?
16:10
You know, some guys think we're going to ship 1011 weights over.
16:13
I'm not looking for that. I think if, if something's
16:15
weighing 1000 lbs down in Mexico, it's already in a feed
16:17
yard. So you know, I, it's, it's going
16:20
to matter. Those weight classes are
16:22
definitely going to affect us. So if they're shipping in
16:25
heavier cattle, they might go right to the feed yard versus,
16:28
you know, standard practice with shipping like cattle and send
16:31
them out to wheat. So it'll be interesting how that
16:34
goes. But it's yeah, it's the big
16:37
elephant in the room once again. Everybody's waiting for that
16:39
shoe to drop and they open it. But Samantha's 100% right.
16:42
They're not going to open all the borders at once.
16:44
And there's not a million head waiting to cross day one.
16:47
So it'll be interesting it. Definitely will.
16:51
Are there any other things in the markets that we have missed
16:55
today or anything else that we kind of need to head on before
16:58
we wrap it up? Yeah.
16:59
Nice to go ahead, Samantha. I think another big elephant in
17:03
the room. It's like spread.
17:06
I mean, heck, we hit .17 yesterday.
17:09
Oh, I mean, people are kind of wondering where that's coming
17:12
from. I think a lot of it could be,
17:13
you know, we talked about ground beef being in high demand, which
17:16
is a little unseasonal and seasonal, but also there isn't a
17:20
lot of select cuts available. I mean, cattle grading above
17:23
choice have reached all time records, you know, probably due
17:25
to cattle being on feed for longer periods of time this past
17:28
year. So we have more of those premium
17:30
cuts available. I think choice cut it's you know
17:32
they lost some pricing leverage, but definitely a little I mean
17:36
that that narrowing is is crazy for this time of year.
17:39
I know you typically it is pretty pretty narrow, but point
17:42
17 is just crazy. Jen, what are your thoughts?
17:46
Yeah, 100% spot on there. The other thing is, you know,
17:49
it's pretty common this time of year.
17:51
You get that post holiday little, little rush in the beef
17:54
prices. I think I'm more looking forward
17:56
to see what beef does towards February.
17:58
That last week of January, 1st week of February I think really
18:02
tells a pretty important picture of what demand is like.
18:06
It's not a mess. You know, don't let anybody tell
18:08
you you know, we're going to beef is going to be worthless.
18:11
Yeah, it's it's slowed down obviously from 380 to 417
18:16
prices. Our movement slowed down at
18:18
those levels, but you know whether we're going to go to
18:21
three 3335 beef in February or if we're going to hold this 350
18:26
level because our kills are lower, I think that's going to
18:29
be be a big thing. So obviously we've got the
18:32
leverage over the Packers right now.
18:34
If they can hold that beef price, I, I think we can stay
18:36
close to this 230 cash market, but they start sliding that beef
18:40
back to 3:30 I think if things change pretty darn quick.
18:43
So be interesting how the kills work out like.
18:47
And at the same time, you also got, you know, a plant and a
18:49
half going down here end of the month.
18:51
So how's that going to affect us?
18:53
At the same time, we typically look for, you know, our, our
18:57
seasonal low and beef demand. So yeah, Feb one's going to be
19:01
interesting. Buckle up.
19:03
Definitely, and I think everyone is kind of also waiting for the
19:06
shoe to drop, like you said of just winter in general.
19:09
I think we've had a really mild winter for the most part across
19:12
most of the United States, other than kind of our northern states
19:14
that have gotten hit a few times, but also waiting for that
19:17
shoe to drop there and how that will inevitably affect things as
19:21
well. So a lot of things to wait for
19:23
as we go into the next few months.
19:25
Dan, Samantha, as always, thank you for your time to all of our
19:28
listeners. If you are interested in looking
19:31
into LRP rates, insurance, anything like that and seeing
19:34
what works for your operation, make sure you check check out
19:37
the show notes down below and you can get a hold of one of our
19:39
team members and they can help you figure out what works best
19:42
for you and your operation. Dan Samantha, as always, thank
19:45
you for your time. To all of our listeners.
19:46
We will see you all next time on another episode of the Cattle
19:49
USA Daily Podcast. Have a good one y'all.