Herd Still Contracting
The July Cattle Report shows continued pressure on U.S. inventories. Total cattle and calves were 94.2 million head as of July 1, 2025, down 1.3% from 2023. Beef cows slipped to 28.65 million head (-1.2%), while replacement heifers fell 2.6% to 3.7 million head.
➡️ Implication: With fewer replacements, herd expansion is unlikely to begin before 2027.
Feedlots Retain More Heifers
The Cattle on Feed report highlighted 11.1 million head in feedlots, 2% lower than last year. Steers on feed rose 1%, but heifers dropped 5%, signaling stronger retention for breeding. June placements were 8% below 2024, and cattle over 150 days on feed were 14% higher year over year, suggesting feedlots are stretching time on feed.
➡️ Implication: Heifer retention points to rebuilding intentions, but reduced placements tighten near-term supplies.
Production Outlook Falls
USDA trimmed beef production forecasts again:
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2025: Now 25.9B lb, down 262M lb from last month and 4% lower year over year.
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2026: Reduced 345M lb to 25.5B lb, a 2% decline from 2025.
➡️ Implication: Smaller calf crops, fewer placements, and lighter carcass weights will constrain supplies through 2026.
Prices at Historic Highs
Cattle and beef prices are setting new benchmarks:
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Slaughter steers hit $243.17/cwt in early August, surpassing June’s record of $238.91. July averaged $237.09/cwt, about $42 higher than last year. Forecasts now call for $227.06/cwt in 2025 (+21% y/y) and $243.50/cwt in 2026(+7%).
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Feeder steers at the Oklahoma City Stockyards averaged $335.09/cwt in July, nearly $25 above June and $72 higher year over year. Prices are forecast at $343–$345/cwt in late 2025, rising to $350.25/cwt in 2026.
➡️ Implication: Producers benefit from record returns, but higher costs will squeeze feedlot and packer margins.
Exports Slow, China Weakens
Exports totaled 217M lb in June, down 17% year over year. Year-to-date shipments reached 1.4B lb, 8% lower than 2024.
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South Korea is the exception, with exports up 9% year to date.
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Japan, Mexico, Canada, and Taiwan all posted declines.
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Exports to China plunged 39%, pulling down the overall forecast.
➡️ Implication: Global demand is uneven, and reliance on South Korea highlights risks of market concentration.
Imports Reshaped by Tariffs
First-half beef imports totaled 2.94B lb, up 33% from last year. Brazil accounted for 742M lb, already exceeding all of 2024. But with a 76.4% tariff on Brazilian beef taking effect in August, volumes are expected to shrink. Australia, New Zealand, and Mexico are poised to fill part of the gap.
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2025 imports: 5.27B lb (+14% y/y).
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2026 imports: 4.95B lb (-6% y/y).
➡️ Implication: Trade flows are shifting away from Brazil, reshaping U.S. reliance on Oceania suppliers.
Outlook: Tight Markets Ahead
The U.S. beef sector faces fewer placements, shrinking calf crops, and reduced production. At the same time, record-high cattle and beef prices signal robust demand. With herd rebuilding delayed, tight supplies and historically strong prices are expected to continue well into 2026.
By the Numbers (2025–26)
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Herd size: 94.2M head (-1.3% vs 2023)
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Beef production: 25.9B lb (2025, -4%); 25.5B lb (2026, -2%)
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Slaughter steers: $227/cwt (2025, +21%); $243/cwt (2026, +7%)
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Feeder steers: $345/cwt (late 2025); $350/cwt (2026)
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Exports: 2.68B lb (2025, -11%); 2.55B lb (2026, -5%)
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Imports: 5.27B lb (2025, +14%); 4.95B lb (2026, -6%)
Further Resources: Full details are available in the USDA Livestock, Dairy, and Poultry Outlook — August 2025, including downloadable Beef Forecast Tables XLSX.
