24 NEBRASKA CATTLEMAN January 2026 Cattle and Beef DERRELL S. PEEL, PH.D. | EXTENSION LIVESTOCK MARKETING SPECIALIST, OKLAHOMA STATE UNIVERSITY Cattle and beef prices set new records in 2025 before facing a significant setback late in the year. High beef prices were the subject of intense political and public scrutiny in the fourth quarter of 2025. Though cattle markets are in a correction late in 2025, strong supply and demand fundamentals are expected to push cattle prices to new highs in 2026. Cattle Cycle Status Coming into 2025, the beef cow herd totaled 27.86 million head, the lowest inventory since 1961. This follows six years of drought-enhanced liquidation since the most recent peak in 2019 that saw a herd decrease of 3.78 million head, down 11.9 percent in the last six years (Figure 1). There are indications that the beef cow herd is stabilizing at the current level and the 2025 inventory may be the cyclical low for this cattle cycle (11 years after the previous low in 2014). The beef cow herd is stabilizing because beef herd culling has dropped low enough to avoid further liquidation. 2025 beef cow slaughter is projected to be down nearly 41 percent from the recent peak in 2022, and would represent a national culling rate less than 8.5 percent, down from the 2022 record culling rate of 13.2 percent. Decreased cow culling is one of the factors needed for a cyclical inventory low before the next herd expansion. The Jan. 1, 2026, beef cow inventory may be just slightly higher year over year, making 2025 the cyclical low, 11 years after the previous low in 2014. However, beef cow herd expansion requires heifer retention. The inventory of beef replacement heifers has continued to decline since 2017 (Figure 2). While the beef cow herd may be stabilizing, the lack of beef replacement heifers means that no significant herd growth is possible in 2026 and very likely in 2027 as well. In the closing weeks of 2025, there is no evidence that any significant heifer retention has started. It appears that the industry continues on a delayed and slow process of herd rebuilding that will likely take until the end of the decade. Cattle on Feed Seven years of declining calf crops have resulted in extremely tight feeder cattle supplies that pose additional challenges for feedlots. The 2025 U.S. calf crop is projected to be the smallest since 1941. Try as they might to maintain inventories, feedlot numbers inevitably will come down. In November, the feedlot total was 11.7 million head, down 2 percent year over year. The average monthly feedlot inventory for the past year is at the lowest level since November 2018 and is expected to continue decreasing in the coming months. 27 28 29 30 31 32 33 34 35 36 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 2023 2026 Figure 1. U.S. Beef Cow Inventory Million Head, January 1 PERSPECTIVES
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