Call the Market

Inarguably, the most highly anticipated cattle report of the year is set to be released this upcoming Friday, Jan. 30 -- the biannual Cattle Inventory report. And while we track, monitor and analyze other various reports throughout the year, this report differs: It sets the tone for the marketplace moving forward, as it gives a 10,000-foot view of what's happening with the industry's core, the U.S. beef cow herd.

Last January, the U.S. beef cow herd was announced to be at a historic low of just 27.9 million head -- the lowest the market has seen since 1962 -- and it was the sixth consecutive year where the beef cow inventory declined year over year. But with record-high prices across the entire industry last year -- including fed cattle, cull cows and bulls, and feeder cattle -- everyone is anxious to see what may be unveiled later this week, and more importantly, how that data may affect the year ahead.

If you think of years past -- specifically, the last time the cattle cycle peaked in terms of price and began to see herd-rebuilding take shape -- that was in 2014, when the Cattle Inventory report showed the U.S. possessed 29 million head of beef cows. By 2015, that quickly climbed to 29.7 million head of beef cows, and consequently, the number of beef cows continued to grow until 2019 when the cycle peaked at 31.8 million head.

Part of the reason why cattlemen are anxious to see Friday's Cattle Inventory report is they remember how quickly the market changed during the last cycle. It seemed as if overnight feeder cattle prices went from being record high in 2014 to quickly deteriorating from 2015 all the way through 2020.

While I'm a major proponent of learning from history so that, hopefully, the hard lessons learned from years past don't have to be painfully relived, I don't believe that this cycle is going to be a cookie-cutter replica of past cycle. This is for several reasons. Let's discuss those in detail.

1) I don't believe the market is going to see the same rapid-fire regrowth in the cow herd that the industry did back in 2015 to 2019. Although feeder cattle prices are rewarding right now, the costs required to operate are nauseating.

2) Even though feeder cattle prices were a record-high throughout 2025, producers have become keenly aware that while prices remain so high, so is the risk throughout this line of business.

3) I don't believe the industry is going to see a quick rebuild in the U.S. beef cow herd as more and more cattlemen are aging out of the business, and the capital required to enter the business is a true barrier for young producers.

4) I believe that the inability to find grass to graze will limit the growth of the cow herd. It's becoming an increasingly difficult challenge for cattlemen -- whether that's because of urban sprawl, pastureland being turned into row crops, or pasture no longer being grazed, for hunting purposes. Finding summer pasture for cows is a true limiting factor for the cattle sector.

There are two likely outcomes for Friday's report regarding the size of the U.S. beef cow herd.

First, there's a chance the report could unveil merely steady numbers, or it could show a slight increase in inventory. I believe the report will showcase a steady inventory; although cull-cow slaughter speeds have declined, that is a logical outcome following years of extremely high slaughter speeds.

Second, the Jan. 23 Cattle on Feed report showed that heifers account for 38.7% of the total number of cattle on feed, which indicates that producers are still sending the vast majority of their heifer calves to town as opposed to keeping them for replacement purposes.

But even if I'm wrong about my assumption for what Friday's report is going to unveil, I strongly believe that this rebuild isn't going to mirror what the industry saw from 2015 through 2019, as it is an entirely different marketplace. Either way, I encourage you to look for Friday's report and, as always, to react purposefully to the report's findings, and not emotionally.

ShayLe Stewart can be reached at ShayLe.Stewart@dtn.com

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