Herd Size

$4 Feeder Cattle: Dream or Reality?

Tue, 28 Oct 2025 14:50:41 GMT

As October draws to a close, U.S. officials are reportedly going to meet with Mexican counterparts this week to talk about reopening the border . The possibility of trade resuming, coupled with President Donald Trump’s comments on lowering beef prices and Agriculture Secretary Brooke Rollins’ announcement to “fortify the beef industry,” sent the cattle market spiraling in recent days.

Despite the downturn, the fundamentals haven’t changed: reduced supply and strong consumer demand are fueling record-high market prices.

“The reduction in available supply and robust beef demand to-date has clearly provided price support,” says Glynn Tonsor, Kansas State University professor of agricultural economics. “Tied to that is the biggest risk in my opinion — beef demand. Anything that erodes beef demand strength, most likely macroeconomic and consumer income in nature in my opinion, will put downward pressure on cattle of all weight classes.”

Tonsor says he never gave $4 much thought until the past couple of years.

“If we adjust for inflation or consider production costs, $4 feeders aren’t what they used to be. It takes $4-plus feeders to generate the net returns we used to get from lower prices,” he explains. “These are profitable prices for ranchers — and it’s about time.”

Tonsor predicts feeder cattle prices to continue under current conditions but does not predict increased profitability due to increasing operating costs.

“The 2025 bull market has been exceptional by every measure,” summarizes Lance Zimmerman, RaboResearch Food & Agribusiness senior beef industry analyst. “500-lb. steer prices are now more than 50% higher than last year, and 800-lb. steer prices are nearly there at just under a 50% price increase year-over-year.”

As a frame of reference, the CME feeder cattle cash index, which captures the average 700 lb. to 899 lb. steer price, averaged $367.08/cwt. the week of Oct. 20. This fall, livestock auction markets across the country have reported lightweight feeder cattle surpassing the $4 mark.

“I think it is entirely possible for feeder cattle to get to $4,” says Don Close, Terrain Ag senior animal protein analyst. “However, I think it will be late summer and fall 2026.”

According to Close, there are three critical components for feeder prices today:
1. Mexican border reopening
2. What disruptions could come to the beef-on-dairy supply
3. Feed prices

“Of that list, Mexico border closure is the real wild card,” he explains. “I don’t see a measurable disruption to beef-on-dairy or feed costs in the near term.”

When Will We Hit the High?

Oklahoma State University’s Derrell Peel, Extension livestock marketing specialist, explains the highest average prices are likely a year or more after heifer retention begins.

“We don’t have any confirmation heifer retention has started to any significant level in 2025,” Peel says. “We have already pushed off any signs of herd rebuilding by one to two years longer than I earlier expected, and we are looking at extending it another year if heifer retention does not start in the fourth quarter. Because the response has been much slower this time than previous cattle cycles, prices have certainly gone higher than I would have expected a year or two ago — though I did expect record-high prices.”

Peel predicts the next expansion phase will be different than the 2014-19 expansion cycle.

“The 2014-19 herd expansion was historically rapid, this current one is historically slow,” he says. “It is a combination of a lengthy list of factors that combine to make this a slow response, and it looks like it will remain a slow, lengthy process.”

Close shares his thoughts on the complexities of the current cycle:

Drought and economic stress. “As an industry, we didn’t fully recognize the severity of the drought as well as the degree of economic stress to the sector,” he says. “The fallout of the 2014 to 2015 price drop is still fresh on producers’ minds, so they have been using the prices of the past three years to get balance sheets in order, pay down debt and now are starting to make capital improvements.”
Producer age. “The average age of cow owners is a factor, so many have used current prices to liquidate and retire,” he says.
Female costs. “Replacement female prices that range from $3,000 to $5,000 restricts and scares some away,” he says. “That is only compounded with the addition of current interest rates.”
Cow size. The escalation in average cow size limits how many cows can run on a given unit of pasture.“
Land. “You hear producers make comments on the difficulty to find additional pasture in order to expand,” he says.

“This cycle has been driven or limited from a combination of all the above,” he says. “Our view is we need to rebuild by 2 to 2.5 million head. Keep in mind, given the escalation in carcass weights, we don’t need as many cattle to produce an equal quantity of beef.”

Close adds his thoughts regarding the impact of last week.

“Given all of the turmoil over the past week it is going to be even more difficult to trigger expansion,” he says. “There is no work around for destroyed producer confidence. I think current market action will further delay expansion.”

Ag Economists’ Monthly Monitor Predicts Bull Market to Continue

Cattle prices are expected to stay high well into 2026, according to the latest Ag Economists’ Monthly Monitor from Farm Journal. Nearly half of agricultural economists surveyed (47%) believe the current bull market in cattle could continue another 19 to 24 months, while another 27% say it could last 13 to 18 months. Only 7% expect prices to peak within the next six months.

“This run isn’t over,” one economist wrote. “At current prices we will see no or little herd expansion.” Another adds the fundamental supply side remains tight: “Clear signals that domestic beef production is increasing may be the key catalyst for a market top.”

“This is a nature of biology to some extent, it takes a while once you even start to retain a heifer for that heifer to produce a calf that then becomes a feeder calf that then becomes a fed calf that then becomes beef at the grocery store itself,” says Ben Brown, an Extension economist with the University of Missouri. “I don’t think we’ve seen necessarily the top of this cattle market yet.”

Even if cattle prices are close to seeing a top, that doesn’t mean prices will crash, he adds.

October Ag Economists’ Monthly Monitor

(Lindsey Pound)

What Could End the Rally?

When asked what might trigger a peak in cattle prices, responses to the Ag Economists’ Monthly Monitor were mixed — but demand destruction and herd rebuilding topped the list. Economists were asked to choose between five options, including:

The reopening of the U.S./Mexico border to Mexican feeder cattle imports
U.S. economic concerns with fallout from trade tensions with China
Removal of tariffs that would resume high levels of beef imports from Brazil
Demand destruction in the U.S. market

One respondent notes, “All of the above are relevant, but clear signals that domestic beef production is increasing may be more important.” Others pointed to a slowing U.S. economy or producers “beginning to hold back replacement heifers” as potential turning points.

“I have no idea what creates the top, but at current prices, we will see no/little herd expansion,” adds yet another economist.

“Beef Prices Can Stay High Longer Than Most Expect”

Economists agree the U.S. cattle market remains fundamentally strong, supported by limited supplies, robust export demand and solid retail prices. However, they caution the same forces keeping prices high — tight herds, high feed costs and inflation — could eventually cool the rally.

As one economist sums it up: “Beef prices can stay high longer than most expect — until consumers finally say ‘enough.’ That’s when we’ll see the turn.”

U.S. Cattle Inventory Reaches 73 Year Low

Fri, 27 Sep 2024 18:26:37 GMT

Not many ranchers active today will remember the last time the U.S. cattle industry was this small. On January 1, 2024, the All Cattle and Calves inventory was 87.15 million head, the smallest total inventory since 1951. The All Cattle and Calves inventory is 1.9 percent smaller year over year and is the fifth consecutive year of declining cattle inventories, a total decrease of 7.65 million head or 8.1 percent since the most recent peak in 2019. The 2023 calf crop was 33.6 million head, down 2.5 percent year over year and the smallest calf crop since 2014.

The January 1, 2024 beef cow herd inventory was 28.22 million head, down 2.5 percent year over year and a decrease of 3.47 million head or 10.9 percent lower, from the cyclical peak in 2019 (Table 1). The current beef cow inventory is the smallest beef cow herd since 1961. Table 1 shows that the top ten beef cow states, which currently represent 57.3 percent of total beef cows, accounted for 79.4 percent of the year over year decrease in total beef cow numbers and 67.7 percent of the decrease from 2019 to 2024.

The inventory of beef replacement heifers on January 1, 2024 was 4.86 million head, down 1.4 percent year over year. However, the 2023 beef replacement heifer inventory was revised down by 4.5 percent from the initial value reported one year ago. Thus, the 2024 inventory of beef replacement heifers is down 11.4 percent from the 2022 inventory and is the smallest beef replacement heifer total since 1950. Since 2001, USDA has provided the portion of beef replacement heifers that are expected to calve in the coming year. The current inventory of these bred beef heifers is 3.05 million head, the smallest in the data back to 2001.

The estimated supply of feeder cattle outside feedlots is calculated by summing the inventories of other heifers, steers >500 pounds and calves <500 pounds and subtracting the inventory of animals already in feedlots. On January 1, 2024 inventories of other heifers, steers and calves under 500 pounds were all down year over year and feedlot inventories were up 1.6 percent leading to an estimated supply of feeder cattle outside feedlots of 24.2 million head, down 4.2 percent from one year ago. The estimated feeder supply can be consistently calculated back to 1972 and the 2024 value is the smallest in that 53-year period.

The smaller cattle inventory is projected to result in a decrease of about five percent in total beef production to roughly 25.5 billion pounds in 2024. That’s three times as much beef as was produced in 1951, the last time the total cattle inventory was this small; impressive growth in productivity in the beef cattle industry. Nevertheless, the current ability to produce beef is smaller than market potential today and the industry will look to rebuild numbers and increase beef production when conditions allow.

Derrell Peel, OSU Extension livestock marketing specialist, says the recent extreme temperatures in the country could negatively impact prices on SunUp TV from January 27, 2024. https://www.youtube.com/watch?v=L_Bgb-OUYWo

Ag Economist Talks Trends To Watch In The Livestock Industry

Wed, 24 Jul 2024 20:49:35 GMT

After a tough couple of years in the livestock industry, Scott Brown, an ag economics professor at the University of Missouri, says there may be a light at the end of the tunnel. He recently joined the Top Producer podcast to share what he believes is on the horizon for beef, dairy and pork producers.

Rebuilding In Beef
Brown shares the current state of the beef industry began forming in 2020. And after three years of drought in cattle country, as well as significant liquidation, there’s a supply shortage.

“I think it’s taken us longer than maybe we typically would have thought to get some rebuilding to happen,” Brown says. “You add on top of that costs have just continued to go higher, so the prices we need for cattle to generate the interest to grow herds are very different today than just a few years ago. A lot of that’s at play.”

He expects to hit 2026 before there is significant growth in the country’s beef cattle herd.

“At some point, there will be enough profitability to get more beef cows back in the herd,” Brown says. “I think the operations will also continue to get bigger on the cow/calf side.”

Improvement In Pork
Coming off of a year Brown likens to 1998 for pork producers, he says the financial side is showing signs of improvement.

“By April, we were starting to see hogs that might have been in the black again for the first time in several months,” Brown says. “There’s still a lot of them that have probably a reasonably deep financial hole to climb back out of given how tough 2023 was, but it’s good to see some positive news on the pork side.”

He adds productivity has been phenomenal and anticipates international demand to play a large role in the future.

“Even though we’ve been losing sow inventories in the country, productivity has more than offset some of that and suppliers continue to run fairly high,” Brown says. “The pork industry generally has been really good about getting international demand to grow in some new places. Central America, Mexico and now some smaller Central American countries are now taking some pork from us. That’s a great longer term move for the pork industry.”

Expanding Demand In Dairy
Like the pork industry, Brown says dairy experienced a tough 2023 due to low prices.

“Dairy markets are the most demand inelastic markets we have in agriculture. But when supplies out strip that demand just a little bit, we can get some fairly low prices. I think that happened in 2023,” he says. “Cheese has been one of the most important demand-side factors. How do we continue to expand that side?”

Looking ahead, Brown says prices have improved in dairy and at the same time, lower prices for corn and soybeans are helping producers as well.

Hear more on the Top Producer podcast .

USDA is Discontinuing A Major Cattle Report, And it Could Now Spur More Volatility For Cattle Prices

Fri, 12 Apr 2024 19:44:58 GMT

USDA announced this week it’s nixing a major cattle inventory report . The July Cattle Inventory report, which is only one of two inventory reports released each year, will be no more.

The National Agricultural Statistics Service (NASS) announced it’s also canceling all county estimates for crops and livestock starting this year. In the announcement, NASS blamed budget cuts from the most recent appropriations bills.

It now intends to only release one cattle inventory report annually in January.

“It’s going to be something to the livestock market and the grain markets are going to have to get used to,” says Chip Nellinger, co-owner of Blue Reef Agri-Marketing. “It obviously has implications as far as what the herd size and the different classes and weights across our cattle herd are. So that’s going to be a big unknown in the middle of the year.”

Nellinger says the other side is how the report could also impact the grain markets.

“What’s that mean to feed demand? How many head of cattle are on feed,” says Nellinger.

Related News: NASS Discontinues County Estimates For Crops And Livestock and July Cattle Report

At a time when tight cattle supplies generated record-high cattle prices already this year, the timing of no July Cattle Inventory report is also murky. Arlan Suderman of StoneX Group says it will have an impact on the cattle markets.

“It adds to the volatility, it definitely does,” says Suderman. “The frustration in the industry is when they look at some of the things that USDA is spending money on, that don’t seem to be part of the original mission of the agency, and then short change us on issues that really have an economic impact on the development and progress of the economy of this industry. That’s where the frustration is.”

Related News: U.S. Cattle Inventory Reaches 73 Year Low

NASS’ decision to cancel the report is garnering frustration from farm group, including the National Cattlemen’s Beef Association (NCBA). NCBA also thinks this could mean more volatility for the market and make it more difficult for producers to see into the future when it comes to supplies.

USDA tried to cut the July cattle inventory report in 20-16 and ended up reinstating it. NCBA calling on NASS to reverse its decision again.

The El Niño Effect: Is El Niño to Blame for the Historic Heat and Drought that Gripped the U.S. in 2023?

Tue, 02 Jan 2024 22:10:01 GMT

2023 was a year full of weather impacts on crops and livestock. From the intense heat in the South to the drought that parked itself across the South and Midwest, USDA meteorologist Brad Rippey says those are the two weather events that stole headlines this past year.

“When we look back at 2023, I’m actually going to break heat and drought into two separate categories,” says Rippey. “Really, when you look at the extreme heat this past year, it was focused across the deep South from Arizona to Florida, and pretty much everywhere in between. And that was certainly a huge weather story that affected parts of the cotton belt.”

From wiping out a large part of the cotton crop in west Texas to hitting sugar cane production in Louisiana, Rippey says nearly the entire deep South saw impacts of the year’s extreme heat.

“Of course, that came with drought in many cases. But when you look at these overall temperatures, the hottest summer on record and a lot of hottest months on record, that was a big story in the deep South,” says Rippey.

While other parts of the U.S. still had drought, in some areas it didn’t pack as big of a punch because it came without the heat. That was the case in much of the Corn Belt. The drought hit last year without the extended intense heat, which had a big impact on crops.

“We were very fortunate, especially in the Corn Belt, that we did not see the combination of extreme heat and drought at the same time. And that actually led to some of those better outcomes than expected for U.S. corn,” explains Rippey.

With USDA currently projecting the 2023 U.S. corn crop to be the largest on record, Rippey says the mild temperatures are what helped save the crops.

“You do see that things actually turned out better in states like Iowa. When you look at the rainfall numbers, they were abysmal, almost as dry as 2012. But then the heat just wasn’t there. And today’s varieties are little bit more tolerant of drought and heat. And the outcome was a little better than we expected,” says Rippey.

It wasn’t all good news. While crop yields turned out better than expected for some farmers, the lack of moisture continued to dwindle grazing conditions and hay stocks in 2023. Those created additional hurdles in rebuilding the shrinking U.S. cattle herd.

So, what was the culprit that caused the intense heat that suffocated the South during the summer months? Rippey says while it’s still being studied, he thinks it’s tied to one major weather event in 2023, in particular.

“I will go out on a limb and say that that may have been an early sneak attack from El Niño ,” says Rippey. “The reason I say that is that because we did have an early onset El Niño. It was pretty much in place by late spring, early summer. It’s pretty consistent with El Niño to have a big ridge of high pressure that comes out of Central America. And at times, we’ve seen it before, that does sometimes extend all the way into the southern tier of the United States.”

He says El Niño can also be tied to the shipping crisis that wreaked havoc on exports in 2023, causing massive shipping delays, as well as forcing shippers to carry lighter loads.

“And certainly what happened in Mexico and parts of Central America, think about the Central American drought that’s causing shipping problems in the Panama Canal. A lot of that, I think, could be tied to the heat in the atmosphere related to the early onset El Niño,” says Rippey.

According to Rippey, the drought in the Midwest can be attributed to the blocking high pressure that wouldn’t budge across Canada this past spring, summer or fall.

“The U.S. Midwest happened to be on the southern end of a lot of that high pressure over Canada. So when we think about that, think about the Canadian wildfires, all the smoke coming down. And we were just on the southern edge of that in the Midwest,” Rippey explains.

He says that, along with Northeasterly winds blocking moisture from the Gulf, is what caused the drought in the Midwest.

“At the same time, high pressure was far enough north that the heat and unusual warmth were actually focused across Canada. So, it wasn’t all that hot on the southern end of the high, but it was dry. And that led to that cool drought in the western Corn Belt,” he adds.

El Niño is still in play, as Rippey says El Niño made a splash once again to close out 2023.

“Now that El Niño has kicked in, it’s a strong event, it could be one of the strongest on record,” says Rippey. “We’re seeing that influence of El Niño starting to grab a hold of the reins of U.S. weather patterns. And that’s pretty normal and certainly should continue into early 2024.”

What’s on tap for 2024? Rippey forecasts the intense El Niño will lead to what he calls “pretty profound” impacts for the rest of the winter, and even into spring.