BEEF PACKERS RESEARCH SERIES | RESEARCH PAPER
Feedlot Pricing Grids
How packers price fed cattle by the carcass, what the premiums and discounts are worth this month, and what a grid premium does and does not tell a shopper reading a beef label.
Prepared for publication by Farm Animal Transparency | September 2026
Most fed cattle in the United States are no longer priced by the animal but by the carcass. The grid that sets that price is set by the packer, and the public record of what it pays is thinner than the record of what it deducts.
| At a glance |
| Most cattle are priced on formulas settled by the carcass. In the week ending September 20, 2026, USDA reported about 70% of the steers and heifers it tracked in the five-area market as formula purchases, 17% as negotiated cash, 10% as negotiated grid and 3% as forward contracts (one week; shares move from week to week). |
| This month’s grid, per USDA (week of September 21, 2026): Prime +$17.78/cwt, Select −$21.25/cwt, Standard −$34.86/cwt, Certified Angus Beef +$5.03/cwt, all relative to a Choice base. On a 1,000-lb carcass, Prime versus Select is a gap of about $390 a head. |
| Quality has shifted the grid’s center of gravity. USDA-reported grading for the first quarter of 2026 was 14.83% Prime and 88.21% Choice or better, with Select at a record-low 8.91% (as reported by U.S. Premium Beef). |
| Several published premiums do not move. USDA’s yield-grade, carcass-weight, “All Natural” and NHTC (non-hormone-treated cattle) lines were identical in September 2025 and September 2026, and the “All Natural” weighted average ($22.74) is printed below its own posted range ($25.00–$32.70). |
| A grid premium is not a label claim. A packer’s “All Natural” program and the FSIS definition of “natural” are different things; only one of them reaches the package. |
Abstract
A pricing grid values a finished steer or heifer after harvest: a base price per hundredweight of hot carcass weight, plus or minus a schedule of premiums and discounts for quality grade, yield grade, carcass weight and program eligibility. This paper explains how grids are built, reports the current national premiums and discounts from USDA’s weekly LM_CT169 report, compares them with the same week a year earlier, and sets them against the 2026 cattle cycle (USDA NASS inventories, USDA ERS price forecasts, the Mexican feeder-cattle border). It then separates what a grid premium means inside the packing plant from what a retail label is legally allowed to say, and maps the connection to Farm Animal Transparency’s 16 disclosure categories.
1. How a grid works
Under a grid, the seller is paid on the carcass rather than the live animal:
Carcass value = hot carcass weight (cwt) × [base price ± quality-grade adjustment ± yield-grade adjustment ± weight adjustment ± program premiums and other discounts]
USDA’s own description of the numbers it publishes is precise: the values are “adjustments to base prices, dollars per cwt., on a carcass basis,” based on “individual packer’s quality, cutability, and weight buying programs,” and weighted by each packer’s slaughter volume in the five-state area (Texas/Oklahoma/New Mexico, Kansas, Nebraska, Colorado and Iowa/Minnesota). In other words, the published grid is an average of packer-set schedules, not a public price.
The base price is the largest number in the equation and the least visible. Oklahoma State University Extension fact sheet AGEC-560 (Ward, Schroeder and Feuz) lists five ways grids set the base: the plant average cost of cattle bought for that plant, a specified market report, the boxed-beef cutout, the futures market, or a negotiated price. The authors caution that plant-average bases “do not represent the type of cattle being marketed with the grid” and may decline relative to the cash market as higher-quality cattle are diverted away from cash trade onto grids.
How much of the market is priced this way. USDA’s five-area weekly reports for cattle priced in the week ending September 20, 2026 show:
| Purchase type | Head (steers, heifers, mixed) | Share of the four types | Settled on carcass? |
|---|---|---|---|
| Formula | 206,807 | 70.5% | 191,984 dressed basis (93%) |
| Negotiated cash | 49,154 | 16.8% | Mixed live and dressed |
| Negotiated grid | 28,003 | 9.5% | By definition, carcass premiums and discounts apply |
| Forward contract | 9,298 | 3.2% | Mixed |
Source: USDA AMS reports AMS_2477 (negotiated cash) and AMS_2474 (formula, forward contract, negotiated grid), released September 21, 2026. FAT summed the “total all grades” lines across live and dressed categories. One week only; the mix shifts seasonally. Negotiated grid averaged $352.63/cwt dressed and $233.69/cwt live that week; negotiated cash steers averaged $350.15 dressed delivered and $221.87 live FOB.
Formula cattle are priced off a reference (often the negotiated cash market or a plant average) that the seller does not negotiate that week. As the formula share has risen, the cash trade that anchors many formulas has become a small slice of total volume — the “thin cash market” problem that the American Farm Bureau Federation documented in 2020, when negotiated cash had fallen to roughly 20% of fed-cattle transactions from 50–60% in the mid-2000s.
2. The current grid: what USDA reports this month
The table reproduces USDA’s weekly national premiums and discounts for the week of September 21, 2026, next to the same report a year earlier (week of September 15, 2025). “Per head” is FAT’s illustration on a 1,000-lb hot carcass (10 cwt × the weighted average); dressed weights in the five-area cash trade that week averaged roughly 900–1,020 lb.
| Line (USDA wording) | Range, Sept 21, 2026 ($/cwt) | Wtd avg, Sept 21, 2026 | Wtd avg, Sept 15, 2025 | Per head, 1,000-lb carcass |
|---|---|---|---|---|
| Prime | 0.00 to +35.00 | +17.78 | +18.52 | +$178 |
| Choice | Base | Base | — | |
| Select | −25.00 to −15.00 | −21.25 | −23.72 | −$213 |
| Standard | −45.00 to −22.00 | −34.86 | −36.20 | −$349 |
| CAB | +4.00 to +9.00 | +5.03 | n/r* | +$50 |
| All Natural | +25.00 to +32.70 | +22.74 | n/r* | +$227 |
| NHTC | +19.00 to +40.00 | +20.82 | n/r* | +$208 |
| Yield grade 1.0–2.0 | 0.00 to +8.00 | +3.41 | +3.41 | +$34 |
| Yield grade 3.0–4.0 | Base | Base | — | |
| Yield grade 4.0–5.0 | −16.00 to −10.00 | −8.95 | −8.95 | −$90 |
| Yield grade 5.0 and up | −32.00 to −10.00 | −12.73 | −12.73 | −$127 |
| Carcass 400–500 lb | −45.00 to −15.00 | −36.55 | −36.55 | (light carcass) |
| Carcass 600–900 lb | Base | Base | — | |
| Carcass over 1,050 lb | −25.00 to −10.00 | −16.67 | −16.67 | −$183 on an 1,100-lb carcass |
| Over 30 months of age | −40.00 to −10.00 | −16.68 | n/r* | −$167 |
| Dark cutter | −55.00 to −30.00 | −36.85 | n/r* | −$369 |
Source: USDA AMS, LM_CT169 “5-Area Weekly Weighted Average Direct Slaughter Cattle – Premiums and Discounts,” weeks of September 21, 2026 and September 15, 2025. *n/r = not retrieved for the 2025 comparison; FAT compared the quality-grade, yield-grade and weight lines only. Per-head figures are illustrations, not settlements: a real pen is a mix of grades and weights, and the base price matters more than any single adjustment.
Three things stand out.
- The quality lines move; most of the rest do not. Prime, Select and Standard change week to week (Prime rose $0.90 and Select narrowed $0.39 in the September 21 report). Every yield-grade and carcass-weight value was identical in the September 2025 and September 2026 reports, and the September 21, 2026 report shows zero change for All Natural, NHTC, dairy-type, hardbone, dark-cutter and over-30-month lines. These look like standing packer schedules that are rarely revised rather than weekly price discovery.
- The “All Natural” line does not reconcile. USDA prints a weighted average of $22.74 below the posted range of $25.00–$32.70; a volume-weighted average of values inside a range cannot fall outside it. FAT reports the figures exactly as published and has not been able to determine the cause. USDA does not publish what the “All Natural” or NHTC lines require.
- The Select discount is large but covers fewer cattle. With industry grading at 88.21% Choice or better in the first quarter of 2026 (U.S. Premium Beef, citing USDA), the Select discount now applies to under one carcass in ten. The Prime premium, the CAB premium and program eligibility increasingly decide the spread between an average pen and a good one. On the wholesale side, the Choice-Select boxed-beef spread was $24.97/cwt on September 23, 2026 (Choice $377.31, Select $352.34).
3. Quality grades, and why the grid has shifted
USDA quality grades are assigned by USDA Agricultural Marketing Service (AMS) graders under a voluntary, fee-for-service program — not by FSIS, the food-safety inspection agency. Grades predict eating quality, chiefly from marbling and maturity. The long-run shift is large: Southern Ag Today (Josh Maples, May 2025) summarizes the weekly grading series as moving from roughly 3–4% Prime and 50–55% Choice in the 2000s to 10–12% Prime and around 75% Choice recently, with Select falling from about 35% to under 15%. U.S. Premium Beef’s SEC-filed newsletter for the quarter ended March 28, 2026 reports USDA grading of 14.83% Prime and a record-low 8.91% Select.
Data note: USDA’s weekly National Steer & Heifer Estimated Grading Percent report, the public series behind these comparisons, has no release in USDA’s ESMIS archive after December 30, 2024. Its last week (ending December 21, 2024) showed 11.33% Prime, 72.31% Choice and 13.95% Select. Figures for 2025–2026 in this paper therefore come from secondary sources that cite USDA.
4. Program premiums: CAB, NHTC, “All Natural” and genetics
Certified Angus Beef (CAB). CAB is a private brand of the American Angus Association whose carcass specifications are certified by USDA AMS graders. The current AMS specification (G-1, effective March 4, 2025) requires Angus phenotype or genotype under the Association’s live-animal specification; steer and heifer carcasses only; Prime or Choice with a minimum of Modest 01 marbling and medium or fine marbling texture; under 30 months of age; ribeye area of 10.0–17.0 square inches (to 19.0 with written approval); hot carcass weight of 1,100 lb or less; fat thickness of 1.0 inch or less; moderately thick or thicker muscling; no neck hump over 2 inches; practically free of capillary rupture; and no dark-cutting characteristics. CAB reported a fiscal-2025 acceptance rate of 37.6% of eligible Angus-type carcasses, 5.77 million certified carcasses and 1.235 billion pounds sold. USDA’s grid line for CAB this month is +$4.00 to +$9.00/cwt, weighted average +$5.03.
NHTC (non-hormone-treated cattle). This is a USDA AMS export-verification program created so U.S. beef can be sold into the European Union. Cattle come from approved farms and feedlots with shipping documentation, are segregated at slaughter, and are sampled at slaughter so that FSIS can issue export certification; programs are verified through third-party audits under AMS’s Quality System Assessment framework. Because eligibility depends on the animal’s whole life, the documentation has to begin with the cow-calf producer.
“All Natural.” USDA reports this line without a definition, and in the cattle trade the term usually refers to packer or brand programs whose specifications are set privately. It should not be confused with the FSIS labeling term “natural,” which means only that a product contains “no artificial ingredient or added color and is only minimally processed.” The FSIS term says nothing about how the animal was raised.
A genetics premium: AngusLink Genetic Merit Scorecard (GMS). In August 2024, National Beef and U.S. Premium Beef (USPB) began paying $5 a head for cattle with a GMS Beef Score of 100 or more; in December 2024 they added $10 a head for scores of 150 or more. Eligibility, per the American Angus Association: sires predominantly (50%+) registered Angus, at least 75% of the bull battery registered Angus, age-and-source enrollment through IMI Global, marketing through USPB, and delivery to National Beef’s Liberal or Dodge City, Kansas plants. The Association reported that from August 2024 to mid-February 2025 qualifying cattle graded over 44% Prime (against about 11% industry-wide) and averaged about $200 a head over the cash market. These are the program sponsors’ own figures and have not been independently audited. The premium is paid on documented genetics before the carcass is graded, which makes it the most direct grid link yet to the cow-calf producer’s bull-buying decision.
What a grid pays at one packer. USPB, a producer-owned company that files reports with the SEC, reported that cattle on its Kansas grid earned an average total premium of $67.74 a head in the quarter ended March 28, 2026, compared with a live price at the feedyard; its Iowa grid is compared with a dressed delivered price in Iowa/Minnesota. That is one company’s figure for its own members’ cattle, not an industry average.
5. The 2026 market around the grid
| Measure | Figure | Source |
|---|---|---|
| All cattle and calves, Jan. 1, 2026 | 86.2 million head, slightly below 2025 | USDA NASS, Jan. 30, 2026 |
| Beef cows, July 1, 2026 | 28.5 million, down 1% from a year earlier | USDA NASS, July 24, 2026 |
| Beef replacement heifers, July 1, 2026 | 3.80 million, up 3% | USDA NASS, July 24, 2026 (as reported by DTN) |
| Calf crop | 2025: 32.9 million (down 2%); 2026 expected: 32.5 million (down 2%) | USDA NASS, Jan. and July 2026 |
| Fed steer price, 5-area direct, all grades | 2025: $224.37/cwt; 2026 forecast $237.35 (+5.8%); Q4 2026 forecast $225.00; 2027 forecast $237.50 | USDA ERS, Livestock, Dairy, and Poultry Outlook, Sept. 17, 2026 |
| Feeder steer price, Medium Frame No. 1, Oklahoma City | 2025: $321.86/cwt; 2026 forecast $357.01 (+10.9%); 2027 forecast about $342 | USDA ERS, Sept. 17, 2026 |
| Beef imports | 2026 forecast 6.262 billion lb, up 16% | USDA ERS, Sept. 17, 2026 |
Direction of travel. USDA’s September 2026 outlook cut its third- and fourth-quarter fed-cattle price forecasts (to $230 and $225/cwt) and carried lower forecasts into 2027, and the September 11, 2026 WASDE attributed the cut to “lower-than-expected packer demand.” Two structural events frame that demand. Tyson Foods announced on November 21, 2025 that it would close its Lexington, Nebraska beef plant (about 5,000 head a day, roughly 4.8% of daily U.S. slaughter) in early 2026 and move its Amarillo, Texas plant to a single shift. And the southern border, largely closed to Mexican feeder cattle since USDA first suspended imports over New World screwworm in May 2025, has begun a phased reopening: USDA reopened the port at Douglas, Arizona on August 24, 2026 (2,453 head crossed in the first week, per USDA ERS), and Reuters reported that the Santa Teresa, New Mexico port was to reopen on September 24, 2026 at an expected 750–1,600 head a day, against a past peak near 3,000. Imported feeders take months on feed before they reach a grid.
6. Grids and the futures market
CME Live Cattle futures are physically delivered against a par unit of live steers or heifers estimated at 70% Choice and 30% Select, Yield Grade 3, within set weight limits (steers 1,050–1,550 lb). CME Feeder Cattle futures settle in cash to the CME Feeder Cattle Index, a seven-day weighted average of Medium and Large No. 1 feeder steers of 700–899 lb sold in a 12-state region, compiled from USDA and state market-news reporting.
Two consequences follow. First, the Live Cattle par unit (70% Choice) now sits below the industry’s actual grading mix (88% Choice or better in Q1 2026), so a hedge references a lower-quality animal than the typical pen. Second, neither contract prices program eligibility: a futures position or a USDA Livestock Risk Protection policy protects against a fall in the commodity price, not the grid premium a producer expects to earn. A producer who wants to know what the grid adds should compare actual grid settlements with the futures price for the same week, over several pens, before assuming the premium is there.
7. What a grid premium does and does not mean on a label
Grid programs and retail label claims are governed by different rules and are often confused.
| On the package | What stands behind it | What it does not establish |
|---|---|---|
| USDA Prime / Choice / Select | A voluntary AMS grade, applied by AMS graders at the plant. | Anything about how the animal was raised. |
| Certified Angus Beef | AMS-certified G-1 specification, including under 30 months of age and Modest or higher marbling. | Raising practices; CAB is not an antibiotic, hormone or welfare program. |
| “Natural” | FSIS: no artificial ingredient or added color, minimally processed. | No hormones, no antibiotics, or eligibility for any packer “All Natural” grid program. |
| “No hormones administered” (beef) | FSIS approves the claim when the producer supplies sufficient documentation. | Enrollment in the audited, tissue-tested NHTC export program; only NHTC carries that verification. |
| “No antibiotics added” / “raised without antibiotics” | FSIS approves on producer documentation. FSIS’s 2024 guideline “strongly encourages” third-party certification and routine testing, but the guideline is not binding. | That the animal was tested, unless the label names a certifier that tests. |
The grid still matters to a shopper, because it shows what each claim is worth to the seller. When a documented program is worth around $200 a head on a single carcass (NHTC at +$20.82/cwt this month), the value of the documentation, and of verifying it, is concrete.
8. What this means for FAT’s 16 categories
Farm Animal Transparency (FAT) maps what a label discloses against the public regulatory record; it does not rate or recommend. Grid pricing touches at least nine of the 16 FAT categories — 1 USDA/FDA Required Basics; 2 Species; 3 Breed; 4 Country of Origin; 5 Farm; 6 Age at Slaughter; 7 Processor; 8 Who; 9 Brand; 10 Feed; 11 Animal Welfare; 12 Medicine; 13 Hormones; 14 Quality & Palatability; 15 Organic; 16 Supply-Chain Intermediaries:
- Cat. 3 Breed and Cat. 9 Brand: CAB and GMS pay for Angus type and registered-Angus genetics; a CAB label discloses breed-type and brand, verified against an AMS specification.
- Cat. 4 Country of Origin: feeder cattle imported from Mexico finish on U.S. grids; the retail package need not say so.
- Cat. 6 Age at Slaughter: CAB requires under 30 months; the grid discounts cattle over 30 months by a weighted $16.68/cwt. The grid measures age that the label almost never states.
- Cat. 7 Processor and Cat. 8 Who: the grid is written by the packer; the base-price method is not public.
- Cat. 12 Medicine and Cat. 13 Hormones: NHTC and packer natural programs pay for documented practices; retail claims rest on documentation filed with FSIS, with independent testing only where a certifier requires it.
- Cat. 14 Quality & Palatability: the USDA grade is the one grid attribute that routinely reaches the package.
- Cat. 16 Supply-Chain Intermediaries: NHTC and GMS eligibility depend on an unbroken record through every custodian (cow-calf, stocker, feedlot), which is exactly the chain Category 16 asks labels to name.
9. The FAT App
The FAT App scans a meat label and, in about two seconds, at home or standing at the grocery meat case, shows how many of the 16 categories the package discloses and the processing plant’s FSIS enforcement history, joined by establishment number. A shopper holding a package that says “Natural” or “No Hormones Administered” can see which categories that claim fills, which remain silent, and what the plant’s record shows. The app is free, has no paywall, and no emails are collected.
10. Recommendations
For cow-calf producers and feeders
- Before choosing a grid, ask in writing how the base price is set and compare that base with the five-area negotiated price for the same week (AGEC-560 method).
- Ask for individual carcass data back. The grid pays for traits (marbling, yield, weight, age) that the producer can manage only if they can see the results.
- If NHTC, a natural program or GMS is the goal, start the documentation at birth; none of these programs accepts an animal whose record has a gap.
- Treat sponsor-reported premiums (GMS, USPB) as one company’s results, not a market average.
For USDA AMS
- Publish what the “All Natural” and NHTC lines of LM_CT169 require, and the number of packers reporting each line.
- Resolve or explain the “All Natural” weighted average printed outside its posted range, and date-stamp values that have not changed for a year or more.
- Restore or clearly redirect the weekly national steer-and-heifer grading percentage series in ESMIS.
For shoppers
- Read “natural” as a processing claim, not a raising claim.
- Look for a named certifier on antibiotic and hormone claims; a named certifier that tests carries more weight than a claim backed only by producer paperwork.
Rancher-facing market forecasts, including Montana and Northern Plains calf-price analysis, are published separately by Honest Cattle at honestcattle.net.
Sources
- USDA AMS – LM_CT169, 5-Area Weekly Weighted Average Direct Slaughter Cattle – Premiums and Discounts (week of Sept. 21, 2026)
- USDA AMS – LM_CT169, week of Sept. 15, 2025 (ESMIS archive)
- USDA AMS – AMS_2477, 5 Area Weekly Weighted Average Direct Slaughter Cattle, negotiated cash (week ending Sept. 20, 2026)
- USDA AMS – AMS_2474, 5 Area Weekly Direct Slaughter Cattle – Formulated, Forward Contract and Negotiated Grid Purchases (week ending Sept. 20, 2026)
- USDA AMS – AMS_2453, National Daily Boxed Beef Cutout (Sept. 23, 2026)
- USDA AMS – National Steer & Heifer Estimated Grading Percent (ESMIS release archive)
- USDA AMS – Certified Angus Beef G-1 Specification (effective Mar. 4, 2025)
- USDA AMS – Non-Hormone Treated Cattle Program
- USDA NASS – Cattle inventory release, Jan. 30, 2026
- USDA NASS – Cattle inventory release, July 24, 2026
- DTN – “July 1 Cattle on Feed Up 2% From Year Ago; July 1 Cattle Inventory Up Slightly” (trade press, July 27, 2026)
- USDA ERS – Livestock, Dairy, and Poultry Outlook: September 2026 (LDP-M-387, Sept. 17, 2026)
- USDA – World Agricultural Supply and Demand Estimates (WASDE), Sept. 11, 2026
- USDA APHIS – Current Status of New World Screwworm (updated Sept. 23, 2026)
- USDA – Press release suspending live animal imports through southern border ports (May 11, 2025)
- Reuters (Tom Polansek), “US eases screwworm ban on Mexican cattle” (syndicated, Sept. 24, 2026)
- DTN – “Tyson to Close 5,000-Head-a-Day Nebraska Beef Plant Early Next Year” (trade press, Nov. 24, 2025)
- Ward, Schroeder & Feuz – “Grid Pricing of Fed Cattle: Base Prices and Premiums-Discounts,” Oklahoma State University Extension AGEC-560 (2017)
- American Farm Bureau Federation – “Examining Cattle Transactions in the U.S.” (Market Intel, May 29, 2020)
- Maples – “Cattle Prices Hit New Highs and Carcass Grading Trends Over Time,” Southern Ag Today (May 6, 2025)
- U.S. Premium Beef, LLC – Member newsletter, quarter ended Mar. 28, 2026 (Exhibit 99.1, SEC EDGAR)
- American Angus Association – “National Beef, USPB reflect on first year of genetics-based grid premiums” (Aug. 4, 2025)
- Certified Angus Beef LLC fiscal-2025 results, via Perishable News (Oct. 30, 2025)
- CME Rulebook – Chapter 101, Live Cattle Futures
- CME Group – “Understanding the CME Feeder Cattle Index”
- USDA RMA – Livestock insurance program enhancements, incl. Livestock Risk Protection (2026)
- USDA FSIS – Meat and Poultry Labeling Terms
- Federal Register – Availability of FSIS Guideline on Substantiating Animal-Raising or Environment-Related Labeling Claims (Sept. 10, 2024)
- Farm Animal Transparency – Understanding the 16 FAT Categories
Working paper. First prepared March 11, 2026; revised September 24, 2026 with figures and data as of September 21–24, 2026. Premiums and discounts are national weighted averages; individual grid contracts vary. This paper is not marketing or financial advice. Corrections welcome: dirkadams@farmanimaltransparency.com.