Cattle inventory continues to decline

ARLINGTON, Va. — Tight supplies of cattle and resilient demand for beef are expected to support fed steer prices this year, according to projections at the Agricultural Outlook Forum.

The annual forum, hosted by the U.S. Department of Agriculture, included the livestock outlook by Michael McConnell, USDA livestock analyst.

Here are McConnell’s comments:

On Feed Prices

Feed prices are expected to decline in 2025, continuing the trend that began in 2023. Although the 2024-2025 marketing year price is lower year over year, corn prices are expected to be relatively flat during calendar year 2025, after prices have increased since the most recent post-harvest period.

Soybean meal prices have continued to move lower through the second half of 2024, which is expected to carry into 2025 with the marketing year price expected to average $310 per short ton.

Hay production and stocks have been steadily recovering from the widespread droughts in 2022 and 2023 that tightened supplies.

On-farm hay stocks on Dec. 1, 2024, were estimated at 81.5 million tons, an increase of 6% from the previous year and an improvement from the recent low of 71.8 million tons on Dec. 1, 2022.

Alfalfa hay prices have also been trending lower, with 2023-2024 prices declining 18% from the previous year and 2024-2025 prices continuing to fall through Dec. 2024.

On Cattle, Beef

The cattle inventory contracted for the sixth year in 2024. The cattle report estimated the number of cattle and calves on Jan. 1, 2025, at 86.7 million head, marking the lowest level of the national herd since 1951.

The latest 1% decline marked a lower rate of contraction than recent years, however. The number of cows and heifers that calved was estimated at 37.2 million head, slightly lower than the 37.4 million estimated the previous year.

The beef cow herd was estimated nearly 1% lower than the previous year at 27.9 million head, the lowest since 1961.

The 2024 calf crop was estimated at 33.5 million head, only slightly lower from the previous year’s estimate of 33.6 million. The calf crop was relatively large given the fewer number of cows estimated in 2024, suggesting better utilization of the breeding stock and survival rate for calves during 2024.

Although the decline slowed and there was a robust calf crop, the herd is not currently expected to expand in 2025. The number of replacement heifers for the beef herd was 1% lower, as strong feeder cattle prices during 2024 incentivize producers to market their heifers, rather than retain them for breeding.

Replacement heifers in the dairy herd were also 1% lower despite good milk-feed price ratios during 2024, with beef-dairy cross breeding providing dairy producers a strong opportunity to market their calves for the feeder market, as well.

With the smaller cow base and strong feeder cattle prices signaling value for future calves, cow slaughter in 2024 fell 15%. That trend is expected to continue in 2025, particularly with generally favorable forage conditions at the beginning of the year in many key cow-calf regions.

Nonetheless, it will likely take more than the upcoming year for producers to build the breeding herd to the point where herd expansion is realized.

The total number of cattle on feed in U.S. feedlots of all sizes on Jan. 1, 2025, was 14.3 million head, a 1% decline from the previous year. High feeder cattle prices encouraged relatively strong feedlot placements through much of 2024. The result is a relatively large share of the cattle herd in feedlots and a smaller pool of cattle available for placements in 2025.

The limited number of feeder cattle available and robust demand for fed cattle and beef has resulted in cattle being kept in feedlots for longer periods of time and higher market weights.

In 2024, total cattle slaughter was 3% lower than in 2023, but average dressed weights increased by 3%, in part due to steers and heifers spending more time on feed. As a result, beef production was virtually unchanged from the previous year.

Commercial beef production in 2025 is forecast to decrease nearly 2% to 26.6 billion pounds. Tighter domestic feeder supplies are expected to constrain feedlot placements, which will result in lower steer and heifer slaughter.

On Exports

Beef exports declined 1% in 2024 to 3 billion pounds. Shipments to some large markets fell, including South Korea, China and Canada. There were broad year-over-year increases to many midsized markets, however, reflecting relatively resilient demand for U.S. beef products throughout the world despite higher prices.

Beef exports in 2025 are forecast to decrease 7%, largely on tighter domestic beef supplies constraining export availability. Beef imports in 2024 were a record 4.64 billion pounds, an increase of 24%. Strong import growth was seen from Australia, New Zealand, Brazil, Uruguay and Argentina.

Tighter beef supplies make the United States an attractive market for exporters, particularly for lean processing beef due to the reduction in cow slaughter. Prices were attractive enough that significant volumes were imported outside tariff-rate quotas, particularly from Brazil.

For 2025, beef imports are forecast to increase 3% to 4.77 billion pounds.

The 5 Area steer price for 2025 is forecast to average $201 per hundredweight, higher than the 2024 average of $187.12. Tight cattle supplies and strong wholesale beef prices supported prices throughout 2024. Included in the USDA’s 5 Area market are Texas/Oklahoma/New Mexico; Kansas; Nebraska; Colorado; and Iowa/Minnesota.

Steer prices in early 2025 eclipsed the $200 per hundredweight mark for the first time and remained above that level through early February.

Feeder cattle prices for 750- to 800-pound calves in 2025 are forecast to average $274 per hundredweight, compared with the 2024 average price of $251.96. Feeder cattle prices will be supported by the demand for fed cattle and the limited feeder cattle supplies available.