FEEDER CATTLE: HISTORY POINTS HIGHER
MARKET UPDATE
By Mary Kurzweil, Analyst CattleFax
Strength in live cattle has continued to pass through to feeder cattle and calves to start 2026, with the CME Feeder Cattle Index holding primarily between $ 360 –$ 380 / cwt so far this year. With continued tight supplies, widely improving pasture conditions, and heifer retention underway, the seasonal strengthening of feeder cattle prices through summer appears likely to take shape.
Historically, that seasonal pattern is wellestablished. Since 2000, the annual high in the feeder cattle index has never occurred between March and June; in fact, 70 % of annual highs in that time have landed in September to December. With the beef cow herd at or near its cyclical low in 2026, and the calf crop and outside supplies to match, there’ s little reason to expect that pattern to break. Heifer retention means supplies are not growing into the fall, and feeder cattle likely have upside potential into the mid- $ 380s to $ 390 / cwt range, with $ 400 possible but representing the upper end of expectations. Calf prices should reflect that strength as well.
Deferred feeder cattle futures, however, are telling a more cautious story. The August, September, and October 2026 contracts are all trading the strongest yet basis relative to the spot market of the past 20 years on average. The only comparable periods in terms of basis were 2016 – 2018, when the herd was expanding and futures were discount due to the
anticipation of more supply ahead. Of those years, only 2016 failed to put in a higher high in the second half, and today’ s supply fundamentals are decidedly different. Still, the recent basis trends suggest the opportunity to lock in higher prices for feeders or calves may not materialize this year.
The risks signified in the discount futures market are real, even if the native supply picture remains tight. The Mexican border remains the primary wildcard as even a partial reopening would add to the available supply. With no timeline on reopening and New World Screwworm concerns likely limiting feeder cattle movement through at least late 2026, it is looking more like a non-factor for this marketing year. Still, it is an uncertain and fluid situation and could change suddenly, leaving the market vulnerable for a significant correction. On the demand side, fed cattle have continued to push to new highs, but previous cycles have shown those levels are rarely sustained for long. Corn prices are worth monitoring as well, as a meaningful move higher would pressure feeder values through higher costs of gains.
Bottom line: History and fundamentals both point toward higher feeder cattle prices ahead. However, the discount market for fall feeder cattle futures signal the market recognizes potential risks ahead. www. NCBA. org NATIONAL CATTLEMEN 19