USDA’s semi-annual cattle inventory report confirmed the smallest herd in 75 years.
This comes as the cattle industry is still healing from consecutive years of drought, but the surprise is that record high cattle prices aren’t enticing producers to rebuild.
The lack of herd rebuilding has likely extended the historically tight cattle numbers out an additional year.Which means these near to record cattle prices could linger into 2028.
Cattle Inventory Smallest Since 1951
USDA’s semi-annual cattle inventory report confirmed the U.S. cattle herd remains historically small, showing inventory at 86.2 million head, down 317,000 head from last year.
Patrick Linnell, Director of Market Research, CattleFax says: “The total cattle numbers came in down 0 .4 % from year ago, which does take total cattle numbers in the US down to the lowest level that it’s been since 1951. So it does just continue to decline cyclically. and i think that’s the big picture message of this report is that that that expansion while there was some signs of it within this report by and large expansion remains elusive at this point.”
Smaller Beef Cow Herd a Surprise
He says the biggest surprise in the report was a decline in beef cow numbers as the herd is now the smallest since 1961. (Graphic)
Linnell says, “As you looked at just how tight beef cow slaughter was this past year, us and other groups had expected that we would actually see an increase in the beef cow herd. Small, but an increase nonetheless. But however, that’s not what this report showed. It still showed beef cows coming in about 1 % smaller, down about 280 ,000 head.”
Factors Slowing Rebuilding
Linnell attributes the slow expansion to drought, age, lack of labor, higher interest rates, high market risk and financial rebuilding.
“You have a lot of producers who are opting to take the to take today’s paycheck instead of holding back that heifer and counting on returns for her in the future.”
Calf Crop Smallest Since 1941
The calf crop was also down 1.6% at 32.9 million head. The calf crop is the smallest since 1941 indicating the feeder cattle supply will remain tight for a while.”
Linnell says, “The calf crop did come in down about half a million head from year ago, the 2025 calf crop, that is. At the same time, feeder cattle and calf supplies, they continued their decline. 4:02 No surprise there, as you just think about, the multiple years, the continued declines in the calf crop, a slight uptick and heifer retention, and the continued lack of Mexican feeder cattle imports.”
Market Impact
So the cattle cycle isn’t even into the tightest numbers yet.So how long will cattle prices remain strong?
Linnell says, “Fewer potential breeding females coming into 2026 suggests that the calf crop is probably going to be steady to maybe a tick smaller again in 2026 and as you think about the tail of that you know it does suggest that that maybe into the tail of 27 but realistically it’s 2028 before you start seeing an increase in domestic and domestic fed cattle slaughter and domestic fed cattle supplies.”
The wild card is when the border reopens to Mexican cattle.But Linnell is optimistic the cattle market could retest the 2025 highs and stay strong another two to three years.
