Where’s The Beef?

The U.S. live cattle population is at a historic low, decimated by recent droughts and high costs, and shaped over years by real climate challenges, economic pressures, and a structural shift toward efficiency. These factors have reduced the herd size dramatically, tightened supply, and set the stage for higher beef prices in the near future as the industry navigates this trough in the cattle cycle. Despite all of this, consumer demand for beef has remained strong over the past several years in the face of rising prices. That cannot continue forever, but it may continue for the foreseeable future.

As of early 2025, the U.S. live cattle population is at its smallest in over 50 years, reflecting a significant contraction in the national herd. The total inventory of cattle and calves was reported at 87.2 million head on January 1, 2024, a 2% decrease from the previous year and the lowest since 1951. This downward trend has continued into 2025, with the beef cow inventory specifically dropping to 28.2 million head by January 1, 2024—down 2% from 2023 and the smallest since 1962. Cattle on feed, those in feedlots with a capacity of 1,000 or more head, totaled 11.7 million head on February 1, 2025, a 1% decline from the same date in 2024. These figures indicate a persistent reduction in the overall cattle population, driven by a combination of natural, economic, and industry-specific factors.

Recent Impacts (Past Year or Two)

Over the past couple of years, several acute challenges have accelerated the decline in the U.S. cattle population:

• Drought Conditions: Persistent dry weather, particularly in key cattle-producing regions like the Plains and Southwest, has severely limited pasture availability and reduced forage quality. This has forced producers to cull herds or sell off cattle earlier than planned, as maintaining large herds became unsustainable. For instance, drought in 2022 and 2023 led to an 11% increase in beef cow slaughter in 2022 alone, contributing to the sharp drop in inventory.
• High Input Costs: Rising costs for feed, fuel, and other essentials have squeezed producer margins. With grain and forage prices volatile due to weather and global market pressures, many ranchers have opted to reduce herd sizes rather than incur higher expenses.
• Strong Cull Cow Prices: Elevated prices for culled cows in recent years incentivized producers to send more breeding stock to slaughter rather than retain them for rebuilding herds. This short-term economic gain has further depleted the breeding pool, reducing the calf crop to 33.6 million head in 2023—down 2% from 2022 and the smallest since 1948.
• Shift in Heifer Retention: Fewer heifers are being kept for breeding, with many entering the beef supply chain instead. Beef replacement heifers dropped to 4.86 million head by January 1, 2024, a 1% decline from the prior year, signaling a slower pace of herd rebuilding.

Impacts Over the Past Several Years

Looking back over the past decade or so, the cattle population has been shaped by broader trends and cyclical patterns:

• Long-Term Herd Contraction: The U.S. cattle inventory peaked at 132 million head in 1975 and has generally trended downward since, despite periodic expansions. The current cycle, which began contracting around 2019 after a brief growth phase from 2014-2019, has been sharper than some past downturns. By 2023, the total herd had fallen 6% from its 2019 peak of about 94.8 million head.
• Climate Variability: Repeated droughts, notably in 2011-2014 and again from 2020-2023, have disrupted the cattle cycle by reducing pasture and hay production. These conditions forced producers to liquidate herds earlier and retain fewer heifers, accelerating the decline. Oklahoma, for example, saw an 11% drop in total inventory in 2023, one of the largest among major cattle states.
• Economic Pressures: Rising operational costs, including labor shortages and fuel price spikes, have compounded over the years. The 2020 COVID-19 pandemic initially disrupted supply chains and depressed cattle prices, though demand later rebounded. However, inflation in subsequent years has kept input costs high, discouraging herd expansion.
• Consumer Demand and Production Efficiency: Despite the shrinking herd, beef production has remained relatively stable—26.97 billion pounds in 2023—due to heavier carcass weights (e.g., steers averaging 941 pounds dressed weight in December 2023). This efficiency masks the population decline but underscores that fewer animals are producing more beef, a trend driven by technological advances like improved genetics and feed additives over decades.

Current State and Outlook

The U.S. cattle industry is in a phase of tight supply, with the smallest herd in over 70 years juxtaposed against strong domestic and export demand for beef. The calf crop’s continued decline suggests that supply constraints will persist into 2025 and beyond, as it takes years to rebuild herds due to cattle’s long gestation and growth periods (about 2-3 years from conception to slaughter weight). While cattle on feed remain relatively high at 14.4 million head in January 2024 (up 2% from 2023), this reflects a backlog from prior years rather than growth, and numbers are starting to edge down in 2025. The slight 1% drop in replacement heifers from 2023 to 2024 hints at a potential slowing of the contraction phase, but significant recovery is not yet evident.

Until ranchers become incentivized by the market to raise more of their cattle to maturity and enter them into the breeding pool, we will not see a significant rebound in populations. Even if those incentives (lower feed costs, higher price for live cattle relative to feeder cattle, etc.) materialize, it would still take up to a year before the herd size sees any noticeable improvements, and several years to recover substantially. In short, watch for the tightness in this market, and high beef prices at the grocery store, to persist throughout 2025.

Where’s The Beef?

The U.S. live cattle population is at a historic low, decimated by recent droughts and high costs, and shaped over years by real climate challenges, economic pressures, and a structural shift toward efficiency. These factors have reduced the herd size dramatically, tightened supply, and set the stage for higher beef prices in the near future as the industry navigates this trough in the cattle cycle. Despite all of this, consumer demand for beef has remained strong over the past several years in the face of rising prices. That cannot continue forever, but it may continue for the foreseeable future.

As of early 2025, the U.S. live cattle population is at its smallest in over 50 years, reflecting a significant contraction in the national herd. The total inventory of cattle and calves was reported at 87.2 million head on January 1, 2024, a 2% decrease from the previous year and the lowest since 1951. This downward trend has continued into 2025, with the beef cow inventory specifically dropping to 28.2 million head by January 1, 2024—down 2% from 2023 and the smallest since 1962. Cattle on feed, those in feedlots with a capacity of 1,000 or more head, totaled 11.7 million head on February 1, 2025, a 1% decline from the same date in 2024. These figures indicate a persistent reduction in the overall cattle population, driven by a combination of natural, economic, and industry-specific factors.

Recent Impacts (Past Year or Two)

Over the past couple of years, several acute challenges have accelerated the decline in the U.S. cattle population:

• Drought Conditions: Persistent dry weather, particularly in key cattle-producing regions like the Plains and Southwest, has severely limited pasture availability and reduced forage quality. This has forced producers to cull herds or sell off cattle earlier than planned, as maintaining large herds became unsustainable. For instance, drought in 2022 and 2023 led to an 11% increase in beef cow slaughter in 2022 alone, contributing to the sharp drop in inventory.
• High Input Costs: Rising costs for feed, fuel, and other essentials have squeezed producer margins. With grain and forage prices volatile due to weather and global market pressures, many ranchers have opted to reduce herd sizes rather than incur higher expenses.
• Strong Cull Cow Prices: Elevated prices for culled cows in recent years incentivized producers to send more breeding stock to slaughter rather than retain them for rebuilding herds. This short-term economic gain has further depleted the breeding pool, reducing the calf crop to 33.6 million head in 2023—down 2% from 2022 and the smallest since 1948.
• Shift in Heifer Retention: Fewer heifers are being kept for breeding, with many entering the beef supply chain instead. Beef replacement heifers dropped to 4.86 million head by January 1, 2024, a 1% decline from the prior year, signaling a slower pace of herd rebuilding.

Impacts Over the Past Several Years

Looking back over the past decade or so, the cattle population has been shaped by broader trends and cyclical patterns:

• Long-Term Herd Contraction: The U.S. cattle inventory peaked at 132 million head in 1975 and has generally trended downward since, despite periodic expansions. The current cycle, which began contracting around 2019 after a brief growth phase from 2014-2019, has been sharper than some past downturns. By 2023, the total herd had fallen 6% from its 2019 peak of about 94.8 million head.
• Climate Variability: Repeated droughts, notably in 2011-2014 and again from 2020-2023, have disrupted the cattle cycle by reducing pasture and hay production. These conditions forced producers to liquidate herds earlier and retain fewer heifers, accelerating the decline. Oklahoma, for example, saw an 11% drop in total inventory in 2023, one of the largest among major cattle states.
• Economic Pressures: Rising operational costs, including labor shortages and fuel price spikes, have compounded over the years. The 2020 COVID-19 pandemic initially disrupted supply chains and depressed cattle prices, though demand later rebounded. However, inflation in subsequent years has kept input costs high, discouraging herd expansion.
• Consumer Demand and Production Efficiency: Despite the shrinking herd, beef production has remained relatively stable—26.97 billion pounds in 2023—due to heavier carcass weights (e.g., steers averaging 941 pounds dressed weight in December 2023). This efficiency masks the population decline but underscores that fewer animals are producing more beef, a trend driven by technological advances like improved genetics and feed additives over decades.

Current State and Outlook

The U.S. cattle industry is in a phase of tight supply, with the smallest herd in over 70 years juxtaposed against strong domestic and export demand for beef. The calf crop’s continued decline suggests that supply constraints will persist into 2025 and beyond, as it takes years to rebuild herds due to cattle’s long gestation and growth periods (about 2-3 years from conception to slaughter weight). While cattle on feed remain relatively high at 14.4 million head in January 2024 (up 2% from 2023), this reflects a backlog from prior years rather than growth, and numbers are starting to edge down in 2025. The slight 1% drop in replacement heifers from 2023 to 2024 hints at a potential slowing of the contraction phase, but significant recovery is not yet evident.

Until ranchers become incentivized by the market to raise more of their cattle to maturity and enter them into the breeding pool, we will not see a significant rebound in populations. Even if those incentives (lower feed costs, higher price for live cattle relative to feeder cattle, etc.) materialize, it would still take up to a year before the herd size sees any noticeable improvements, and several years to recover substantially. In short, watch for the tightness in this market, and high beef prices at the grocery store, to persist throughout 2025.