US Cattle Herd Lowest Since 1961

REDFIELD, Iowa (DTN) -- Historically high cattle prices are supported by the continuation of a small supply, which has made the overall markets of all cattle higher in 2025 than they were in 2024, according to Oklahoma State University Extension Livestock Marketing Specialist Derrell Peel.

"Feeder cattle, stocker cattle and fed cattle prices have all exceeded the high of the past year," Peel said. "The last time we saw these types of highs was 2014."

The 2014 price highs were driven by drought liquidation, but unlike then when the herd was rebuilt quite quickly, the herd isn't seeing an increase. Peel said even if the herd would start to increase now, the effects of it wouldn't be seen until 2029, which means he thinks prices will continue to be elevated.

HERD LIQUIDATION CONTINUES DESPITE DROUGHT RECOVERY

The price spread continues to get wider between feeders and fed cattle as well, which makes margins a challenge for the producer running stocker cattle. Cull cow prices are extremely high as well, which is another factor in rebuilding the herd.

"The cow inventory has seen liquidation since 2018 and is at the lowest level since 1961," he added. "Beef heifers saved back is also at the lowest we've seen."

Expansion of the herd was seen in 1992 and 1994 and again in 2015 after droughts caused a reduction. But with current recovery from the recent droughts, the cow numbers haven't rebounded back. Peel said dairy replacement heifer levels are at the lowest they have ever been as well. He doesn't expect that to last as long as it has on the beef side.

These low inventories are leading to the smallest estimated feeder supply ever as of July 1. Peel said the positive for feedlots is the low price of feed due to record grain supplies and an increase in hay supply.

BEEF PRODUCTION REMAINS STEADY

Despite all the decrease in supply, the U.S. has seen very little decrease in total beef production. Contributing to that steadiness of beef supply is the trend of dairy producers using sexed male beef semen on their cows to send beef-type cattle to feedlots. Another contributor is feeding cattle to heavier weights. "Consumers are still demanding beef and boxed beef values continue to be strong," Peel added. "There has been a decrease in beef export numbers since the record high in 2023. Some of this is because of lower numbers and some of it is because of higher prices or tariffs."

BORDER CLOSURE AFFECTS BEEF SUPPLY

Beef imports have increased sharply in 2025, especially from Australia and Brazil. Peel said this meat is mostly used in the lean markets for food service. The second half of the year could see some changes in imports due to tariffs on certain countries.

A lower feeder cattle inventory is also seen this year due to the closed border to Mexican cattle because of New World screwworm (NWS) in Mexico. Typically, 1.1 million to 1.2 million head of feeder cattle come across the border to be fed out in the U.S. This year a reduction of about 800,000 head will be seen.

"The cow-calf producers are really in the driver's seat right now as they are seeing the best returns," Peel said. "Feedlots have done OK, but the backgrounders are really having a hard time making much right now."

PRICES STRONG THROUGH 2027

He isn't sure the peak of prices has yet been seen but does expect high prices to continue into at least 2027. If growth does occur, then some price pressure could be seen by the end of the decade.

"Demand continues to be robust for beef, but the volatility potential is high. Producers need to use risk management to protect their investments," Peel concluded.

Jennifer Carrico can be reached at jennifer.carrico@dtn.com

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