Livestock Marketing Information Center
In The Cattle Markets
Updated: 6/23/2025
Rethinking Basis Behavior in a High-Price Cattle Market
When we reach each either extreme of the cattle cycle, it changes how we interpret and forecast price relationships. One challenge is understanding relative prices for cattle in different weight classes and basis, particularly when traditional models rely on historical averages. This article focuses on the role of the cattle cycle, the changing relationship between calf and feeder cattle prices, and the implications for basis.
Livestock Monitor
Updated: 6/20/2025
CATTLE ON FEED
Cattle on Feed was released by the USDA-NASS earlier today. Overall, cattle on feed as of June 1 was down -1.2% from last year to 11,442 thousand head, a result that was anticipated by average pre-report expectations. Losses in cattle on feed were attributed to losses in both marketings of fed cattle (-10.1% to 1,758 thousand head) and placements of cattle on feed (-7.8% to 1,886 thousand head) during the month of May; no discrepancies were observed with pre-report estimates. Specific to fed cattle marketings, analysts were off by only 0.2%, having estimated an average decline in animal numbers of -9.9% and within a range of down -10.7% to -5%. Marketings during May were attributable to one less slaughter day occurring compared to May of last year along with overall tight supplies restricting the number of cattle available for slaughter. Saturday slaughter, a common catch-up day for packers, was down -67% during the month; meanwhile, Friday slaughter fell -13% Y/Y.
HOG PRICES CLIMB HIGHER
Prices for feeder pigs, slaughter hogs, and the pork cutout value have moved higher in recent weeks. Feeder pig prices started to move counter-seasonally higher with early weaned (10-12 lbs.) pig prices rising from $44.41 per head in mid-April to last week’s price of $53.20 per head. At this time last year, early weaned feeder pigs were trending below $40 per head. Prices for 40-pound feeder pigs have held steady between $79.28 to $83.94 per head since late April, bucking the typical seasonal decline during this time of year. During this time a year ago, 40-pound feeder pig prices were trending below $60 per head. Seasonally, early weaned and 40-pound feeder pig prices reach a low in July—that may not be the case this year.
DAIRY PRODUCT DEMAND KEEPING PACE WITH EXPANDING MILK COW HERD
USDA-Economic Research Service (ERS) released estimates of April dairy product usage earlier this week. All the numbers topped forecast assumptions for the quarter. Butter consumption for the quarter was pegged to increase by 12 million pounds; April usage was up 36 million pounds. Chalk this up to more production as the industry produced eight million more pounds at an average wholesale price that was $0.63 per pound lower than a year ago. The bulge in usage likely represents inventory refilling in distribution channels, but wholesale prices have continued to move gradually higher in May and June, implying that inventory problems in distribution channels are not significant.
Livestock Monitor (pdf)