Given the relationship between the size of the US cattle herd and the per-cow returns to cow/calf producers, it’s almost a wonder producers will want to expand their herds again. But one data set doesn’t tell the whole story.
Anecdotal evidence suggests cow/calf producers want to expand their herds after drought and unprofitable conditions in and around 2019 reduced the total US herd to a 75-year low. Each time there is an inkling of a move in that direction, though, drought rears its ugly head again, and the push subsides.
Yet data from the USDA’s Agricultural Marketing Service and the USDA’s National Agricultural Statistics Service that was compiled and analyzed by the Livestock Marketing Information Center in Denver show a strong inverse correlation between producer per-cow returns and total herd size.
PER-COW RETURNS NOT THE ONLY AIM
So, what gives?
The answer likely is very complicated but in over-simplified terms it probably isn’t per-cow returns but per-farm or ranch returns by maximizing land and resource use, a market analyst said. While the total US herd size has that inverse correlation to per-head returns, the farm or ranch may have pasture or range that, given some steady rain, could support more cows.
That might reduce the per-head returns but increase the per-farm or ranch returns and make the whole operation more tenable, the analyst said. And, high per-head returns may not be enough to support the farm or ranch anyway, if there aren’t enough cows to pull the whole financial load.
Plus, a small herd size may leave resources unused, a taxable asset – land – that isn’t pulling its weight.
RECORD HIGH RETURNS
An LMIC graph superimposing annual per-head cow-calf returns against annual Jan. 1 cattle inventories going back to 1997 showed 2025 estimated per-head returns for US cow/calf producers at a record $913.39 with a herd of 86.472 million head, up from $446.49 and a herd of 87.157 million a year earlier.
The USDA projected 2026 per-head returns at $1,139.22 with a herd of 86.155 million.
The next highest estimated annual per-cow return was in 2014 when it was $534.46 when the herd was 88.243 million head.
In 1997, when the data set began, average annual per-head cow/calf returns were estimated at only $3.94 with a herd of 101.656 million head.
FED CATTLE RETURNS ALSO RECORD
Since 2021, average annual per-head returns to cattle feeders including all costs have been above breakeven with 2025 estimates record high. The USDA data showed LMIC-estimated returns for feeding 750-pound steers in the Southern Plains totaled $370.58 per head, compared with the next highest year of 2014 at $274.68.
Positive annual per-head returns in nine of the last 12 years with a string of five in a row suggests there will be a continued desire to feed cattle for slaughter and keep the feeder cattle market strong into the future in spite of high feed costs.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $258.45 per cwt to $258.52, compared with last week’s range of $246.25 to $259.00 per cwt. FOB dressed steers and heifers went for $403.35 per cwt to $403.67, compared with $388.77 to $402.31.
The USDA choice cutout Monday was up $2.83 per cwt at $391.22 while select was up $6.48 at $391.49. The choice/select spread inverted again to minus $0.27 from a plus $3.38 with 71 loads of fabricated product and 31 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $460.46 per cwt, and 50% beef was $190.24.
The USDA said basis bids for corn from feeders in the Southern Plains were up $0.02 to $0.05 at $1.10 to $1.25 a bushel over the Jul corn contract, which settled at $4.75 1/4 a bushel, up $0.04.
The CME Feeder Cattle Index for the seven days ended Friday was $362.45 per cwt, down $1.77. This compares with Monday’s May contract settlement of $368.40, up $1.02.