RATION PRICES STEADY TO HIGHER
MARKET UPDATE
By Shawn Walter, First Look Data Manager CattleFax
Corn futures prices have been volatile as usual during the summer as traders react to each report of crop conditions. Mix in additional unknowns from the ever-changing energy market and the result is December corn futures which traded as low as $ 4.30 / bushel and as high as $ 4.90 / bushel just during the month of July. Just observing corn futures makes forecasting cost of gains challenging. However, data from the CattleFax First Look database shows feedyards have done a good job of pricing their corn inventories.
In contrast to the highly volatile corn futures markets, ration prices have been incredibly steady. In the last 12 months, the national average-dry-matter ration price has only varied $ 16 / ton from a low of $ 290 / ton recorded last December to a high of $ 306 / ton which was recorded early August. That is only a range of 5 %.
Ration prices are trending higher during 2026 but only increasing by about $ 1.50 / ton each month. If that were to continue through the end of the year, ration prices on cattle going on feed in August would average around $ 309 / ton which is 4.4 % higher than the last half of 2025.
Year-over-year changes in ration prices alone would project a cost of gain( before interest) around $ 1.10 / lb. However, performance through the winter of 2025 / 2026 was exceptional. The average-dry-matter feed conversion this February was 6.37 lbs of feed per lb of gain for a steer placed weighing 750 lbs. In a more typical year, you could expect 6.7:1 while a severe winter could easily see dry matter conversions approaching 7:1. If El Niño predictions for a more severe winter through much of the feeding region come to fruition, weather could easily add an extra 10 cents per lb of gain.
Ration prices are trending higher but at a moderate pace. Depending on actual harvested corn yields and fall corn prices, ration prices could be 5-10 % higher on cattle going on feed this month. Throw in the chances for a severe winter and it becomes prudent to expect cost of gain on yearlings going on feed now in the range of $ 1.15 to $ 1.20 / lb before interest.
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