Cattle Economics: Cattle Inventory Highlights

By Dr. Andrew Griffith

The January 1 cattle inventory report is an annual report met with considerable anticipation by folks in the cattle business and associated businesses. This year was no different with most market observers expecting the cattle inventory to be lower for most classes of cattle. This was in fact true. Thus, here are a few of the highlights from a national perspective that many have already seen and hopefully a few aspects that are new to readers.

As of January 1, 2025, all cattle and calves in the United states totaled 86.66 million head, which was 0.6 percent (495,200 head) lower than the previous year, but 8.5 percent (8.00 million head) lower than the last peak in cattle numbers in 2019. It should also be noted that this year’s all cattle and calves number is the lowest since 1951, which is of little importance other than for historical perspective. Understanding the reading audience is more focused on beef cattle, it is appropriate to hone in on classes of beef cattle. The total quantity of beef cows that calved to start 2025 was 27.86 million head, which was a decline of 0.5 percent (149,500 head) compared to the previous year and a 11.9 percent (3.78 million head) decline compared to the previous peak in 2019. Similarly, the quantity of heifers held for beef cow replacement totaled 4.67 million head, which was 1.0 percent lower than 2024 and 26.6 percent (1.69 million head) lower than the previous high in 2017.

Understanding the female picture as previously highlighted brings the discussion to the size of the calf crop. The calf crop was estimated at 33.53 million head in 2024, which is a 0.1 percent (33,500 head) decline from the previous year and a 7.7 percent (2.78 million head) decline from the previous apex in 2018. This would insinuate the number of calves available to enter the feedlot the first half of 2025 is not much different than a year ago. This statement is somewhat supported by the quantity of bulls, steers, and heifers outside of feedlots weighing 500 pounds or more only declining 1.1 percent (21,700 head), 1.0 percent (156,800 head) and 0.6 percent (57,300 head), respectively. Additionally, it seems as if these values indicate cattle being pulled into feedlots a little earlier as the January 1 cattle on feed total only declined 0.9 percent (129,600 head) compared to the previous year.

What does all this mean for the second half of 2025? The quantity of heifer, steer, and bull calves weighing less than 500 pounds was only down 0.2 percent (29,600 head) compared to the previous year. Most of these cattle will enter feedlots from late in the second quarter through the end of the third quarter of 2025. The primary factor influencing how many enter feedlots will be heifer retention for beef cow replacement. If adequate moisture is present to promote forage growth in regions where the cattle herd has declined in recent years then heifer retention is expected.

The Great Plains region has seen the largest declines in beef cow numbers since 2019 and thus have the most potential for growth. The decline in beef cow numbers by state since 2019 is Colorado 197,000 head, Kansas 299,000 head, Nebraska 389,000 head, North Dakota 105,000 head, Oklahoma 200,000 head, South Dakota 363,000 head, and Texas 580,000 head. Other states with large declines in beef cow numbers since 2019 include Iowa (105,000 head), Kentucky (138,000 head), Missouri (195,000 head), Montana (196,500 head), Tennessee (88,000 head), and Wyoming (63,000 head).

As one thinks through these values, it is clear the regions most impacted by drought are the regions where cattle inventory has declined the most. Thus, they have the greatest propensity for rebuilding the herd. It will be interesting to see how states like Texas and Oklahoma respond this time around compared to herd rebuilding a decade ago. Will other states respond in earnest or will they take a slower approach to herd expansion? The industry would probably be better off long term with a slower herd rebuild as that should support prices for a longer time. Will the rebuild exceed 2019 levels? The answer to that is a few years away, but history would say the answer is “no.”