USDA released the January 1 Cattle Inventory report today and the reported numbers were somewhat surprising. According to USDA’s survey, the total inventory was 86.2 million and even with a year ago. My most recent projection was for continued liquidation bringing total numbers down to 85.1 million head, a 1.8% decline. In February 2025, I projected a smaller drop in the inventory, projecting a 1% decline from the prior year. However, as 2025 progressed, indications were for a larger decline in cattle numbers, particularly considering heifer slaughter.
Heifer slaughter during 2025, at 9.5 million, was down 7% from the prior year but still represented 52% of the heifers weighing over 500 lbs. on January 1, 2025. In 2024, the industry slaughtered 56% of the January 1 heifers weighing over 500 lbs. When the industry was retaining heifers to build herds, the percentage of heifers weighing over 500 lbs. that were slaughtered ranged from 39% to 49%.
The survey indicated that the number of beef heifers identified as replacement heifers was 1% above a year earlier while those expected to calve were also up 1% from 2014 or 17% of the beef cow herd. From 2015 – 2018 when producers began aggressively building herds, the average number of heifers that were identified as replacements on the January 1 inventory was 6.2 million or an average heifer retention rate of 21%.
Only time will tell as the year progresses to determine if USDA’s Cattle Inventory is on track. One cross-check will be cattle slaughter which is an actual number reported to USDA by the packers. The inventory is generated from an annual survey number. I understand that USDA aligns annual surveys with the 5-year Agricultural Census. To say the least, I have greater confidence in numbers reported to USDA that can cross-check the validity of the survey.
I do not expect today’s Cattle Inventory Report to have an impact on cattle numbers or the market going forward through 2026 and into 2027, particularly with a 2% smaller 2025 calf crop. Numbers will continue to tighten and when coupled with continued strong demand for beef will support the market at levels at and likely above the market peak seen during 3rd quarter-2025.
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