Fall 2025 was a reminder of how sensitive the cattle market is to news and surprises.
A look at the November 2025 Feeder Cattle futures contract and weekly cash prices in Arkansas highlight just how quickly prices can move, said James Mitchell, Extension economist, at the University of Arkansas, in a Livestock Marketing Information Center letter called In The Cattle Markets.
AN EXAMPLE
In late August, an Arkansas cattle producer looking to sell 550-pound steers in November could have purchased Livestock Risk Protection coverage with a coverage price of $394 per cwt, he said.
That policy would have cost the producer $12 per cwt in LRP premiums, Mitchell said. Over the 13-week coverage period ending Nov. 24, the actual ending value for the LRP policy was $365 per cwt.
That would have triggered an indemnity of $29 per cwt, he said. After accounting for the premium, the net return from the policy was $17 per cwt.
On a 550-pound steer, that translates into $94 per head or $8,500 per load, Mitchell said. In Arkansas, the cash price for a 550-pound steer without LRP was $378 per cwt for the week ending Nov. 21. With LRP, the realized price was $378 + $17, or $395 per cwt.
The scenario that played out last fall occurred in a historically high price environment, he said. LRP and option premiums are not cheap because cattle prices are high.
IS IT WORTH IT?
That has led some to question whether price risk management is “worth it” at today’s price levels, Mitchell said. A $20- to $30-per-cwt decline is the same dollar loss per head regardless of the price level. But when cattle are worth more per head, there simply are more total dollars at risk in the operation.
Given that the cattle inventory cycle is now positioned for a slow rebuilding phase, there is a reasonable expectation that the market will remain supported for the next few years, he said. But as fall 2025 showed, cattle markets are not immune to volatility.
While some producers may be able to absorb a $20- to $30-per-cwt price swing without much consequence, many do not have that flexibility because of debt obligations, recent herd expansion, or tighter operating margins, Mitchell said. For both producers, the cost of LRP is better framed as an operating expense, budgeted on a per-cow basis.
LRP is not about increasing the odds of an indemnity payment or maximizing profit, he said. It establishes a price floor and reducing downside risk.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $235.89 per cwt to $248.00, compared with last week’s range of $239.92 to $246.64 per cwt. FOB dressed steers and heifers went for $372.45 per cwt to $377.44, compared with $376.66 to $382.97.
The USDA choice cutout Wednesday was down $1.56 per cwt at $401.75 while select was off $0.55 at $396.17. The choice/select spread narrowed to $5.58 from $6.59 with 48 loads of fabricated product and 18 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $441.13 per cwt, and 50% beef was $186.81.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $0.90 to $1.05 a bushel over the May corn contract, which settled at $4.63 1/4, up $0.09 1/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $358.32 per cwt, up $0.01. This compares with Wednesday’s Mar contract settlement of $358.72, down $1.07.