USDA’s latest Livestock, Dairy, and Poultry Outlook (Feb. 17, 2026) confirms the U.S. cattle herd continued to shrink in 2025—marking seven straight years of contraction—while tighter feeder supplies and strong early-year weights are keeping the 2026 beef outlook firm.
The big picture
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Cattle inventory (Jan. 1, 2026): 86.155 million head, down 0.4% year over year.
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Beef cows: 27.607 million head, down 1%, and the smallest inventory since 1961.
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Possible early “turn” signal: beef heifers retained for replacement are estimated at 4.714 million head, up nearly 1%, the first YOY increase since 2017—but USDA notes it typically takes 2–3 years of sustained heifer growthbefore beef cow numbers expand.
Production: 2026 forecast nudged higher
USDA raised 2026 beef production to 25.920 billion pounds (up 185 million lbs from last month). The revision reflects a net increase in slaughter expectations and heavier-than-expected carcass weights early in the year being carried forward.
USDA also flags timing: federally inspected steer and heifer slaughter was running behind year-ago pace through January, with late-January winter weather likely a factor. The outlook suggests some first-quarter softness could be partially offset by higher second-quarter marketings, and stronger fed cattle marketings later in 2026 as cattle move from small grains pasture into feedlots.
Prices: records on feeders; fats supported but watching seasonal headwinds
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Feeder steers (OKC 750–800 lb): January average $360.04/cwt, a record for the month; early February sales averaged $364.51/cwt.
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2026 feeder steer price forecast: $364.25/cwt, up $7.25 from last month (+13% vs. 2025).
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Slaughter steers (5-area): January average $234.58/cwt; first week of February $241.31/cwt.
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2026 slaughter steer forecast: $240.25/cwt (up $4.50 from last month). USDA notes near-term pressure is possible as boxed beef often dips seasonally in February and packer margins are relatively weak.
Market read: Tight supplies remain the headline—even with slightly higher placement availability implied by the January Cattle report, USDA’s tone suggests buyers are still paying up for feeders, and fats should remain supported unless margins/wholesale values sag more than normal seasonally.
Trade: exports pressured; imports rise with quota dynamics
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Exports: USDA keeps 2026 exports unchanged at 2.425 billion pounds and notes weaker recent shipments, including a sharp drop to China tied to China’s non-renewal of export registrations beginning April 2025.
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Imports: 2026 import forecast raised to 5.575 billion pounds (+50 million from last month). USDA points to strong demand for lean processing beef and quota mechanics early in the year.
A key policy detail USDA highlights: a Feb. 6 proclamation temporarily increases the U.S. tariff-rate quota for Argentina, allowing additional lean beef trimmings to enter tariff-free in quarterly tranches; USDA expects some of that to displace product from origins facing over-quota tariffs.
Livestock, Dairy, and Poultry Outlook: February 2026 (PDF):
https://ers.usda.gov/sites/default/files/_laserfiche/outlooks/113844/LDP-M-380.pdf?v=32393
U.S. red meat and poultry forecasts (XLSX):
https://ers.usda.gov/sites/default/files/_laserfiche/outlooks/113844/red-meat-and-poultry-forecasts.xlsx?v=36777
