Grid premiums & discounts

Carcass grid premiums and discounts, and how the grid has compared with cash · USDA AMS · week of Nov 2

Grid vs cash

+1.99

Derived · $/cwt dressed · beat cash 56% of weeks428 wks

Formula vs cash

+2.01

Derived · $/cwt dressed · beat cash 65% of weeks428 wks

Forward vs cash

−5.01

Derived · $/cwt dressed · beat cash 42% of weeks428 wks

Grid head adjusted

83.6%

USDA · of 219,915 head on the gridNov 2

Grid, formula and forward prices against negotiated cash Derived

428 weeks · Aug 20, 2018 – Nov 2, 2026

Negotiated grid vs cash

+1.99

per cwt dressed · beat cash in 56.1% of weeks

Formula vs cash

+2.01

per cwt dressed · beat cash in 64.7% of weeks

Forward contract vs cash

−5.01

per cwt dressed · beat cash in 42.1% of weeks

Each method less negotiated cash, week by week · $/cwt dressed · above zero beat cash.

Grid − cashFormula − cashForward − cash

Sold as	vs cash, avg	Beat cash	Worst week	Best week	When cash rising	When cash falling
Formula net	+2.01	64.7%	−19.75	+27.14	+0.50	+5.06
Negotiated grid net	+1.99	56.1%	−17.03	+36.68	−0.42	+6.85
Forward contract net	−5.01	42.1%	−66.77	+37.48	−8.85	+2.71

The grid averaged +6.85 over cash in weeks when cash was falling, against −0.42 when it was rising.

How the three rows are measured

Method

USDA reports what a grid netted and what negotiated cash paid in two separate reports and never sets them side by side. Both carry a dressed-basis weighted average for the same all steers & heifers rollup, so this is the same animal, the same week, the same basis.

Grid and formula have both beaten cash by about $2.01 a hundredweight. Formula is the steadier — it beat cash in 64.7% of weeks against the grid’s 56.1%, at lower volatility, for almost the same average. The grid pays a shade more and makes you live with a wider swing.

Forward contracting’s −5.01 is almost entirely the bull market, not the instrument. When cash was rising it came in −8.85 under; when cash was falling it came in +2.71 over. That is what a forward contract is for — it gives up the upside of a rising market, which is the trade it exists to make.

$/cwt dressed against negotiated cash the same week, head-weighted across every row of each basis. 428 weeks in all: 286 with cash above where it stood eight weeks earlier, 142 below. Live and dressed prices are never averaged together — the two bases have to move as a pair or neither figure means anything. These are price comparisons, not margins. USDA publishes no cost side for a feedlot, so nothing here is a profit.

Grid premiums and discounts USDA

Week of Nov 2

The grid adjusts nearly everything: 83.6% of the 219,915 head sold on it last week carried at least one premium or discount. Across 117 weeks that has never fallen below 80.4% or risen above 90.1%. Selling on a grid is not a coin toss between graded well and didn’t — almost every carcass is priced on its own merits.

Adjustment	This week	Head	Share of grid	117-wk avg	Range	SD
Premiums
Certified / branded program	+6.65	103,133	46.9%	+5.80	2.80 – 9.54	1.59
Quality grade	+5.62	169,977	77.3%	+4.60	3.06 – 6.10	0.54
Yield grade	+1.38	115,756	52.6%	+1.20	0.95 – 1.52	0.11
Carcass weight	+1.03	53,762	24.4%	+1.22	0.81 – 1.65	0.17
Discounts
Quality grade	−2.26	132,746	60.4%	−2.18	−4.72 – −0.84	0.80
Yield grade	−2.48	142,242	64.7%	−1.74	−2.48 – −1.23	0.25
Carcass weight	−1.99	93,879	42.7%	−1.34	−1.99 – −0.85	0.27
Certified / branded program	−0.67	58,810	26.7%	−0.71	−1.69 – −0.53	0.15

These eight rows overlap and must not be added up. The head counts overlap, so the “share of grid” column must not be totaled.

Each row is a weighted average over the head it names, and those groups overlap — a lot appears under both the quality premium and the quality discount when its carcasses graded differently. Last week the quality pair alone covers 302,723 head against a 219,915 head grid. “Share of grid” shows each figure’s reach and is not exclusive. USDA publishes no net, and we do not invent one.

$/cwt carcass, USDA AMS LM_CT145, 5-Area weekly. Grading also pays at wholesale, where the spread is not uniform across the carcass — see the Choice–Select spread by primal. What a shopper pays for a label is a different question again, on the retail page.

Premiums and discounts by region USDA