The beef cattle industry appears to be on a slow path toward rebuilding, said Oklahoma State University Livestock Marketing Specialist Derrell Peel, in a newsletter called Cow-Calf Corner.
Fed cattle prices are expected to peak some months after heifer retention begins, and, at this point, are projected to move higher into 2026 and perhaps beyond, Peel said. A sharp peak followed by a pronounced drop seems unlikely at this point.
Cattle prices likely will remain elevated for much of the remainder of the decade with a gentle peak somewhere along the way, he said. However, the front end of the process has not yet started so the path is subject to change and must be monitored.
NOTHING TO SEE HERE
Despite some anecdotal indications of heifer retention, there is no data to say producers are retaining enough heifers to initiate herd rebuilding, Peel said. Beef cow slaughter dropped enough in 2025, following decreases in 2023 and 2024, to hint at a slight increase in beef cow inventories going into 2026.
While that would make 2025 the cyclical inventory low, the lack of heifer retention thus far means no significant herd growth is possible in 2026, he said. Unless data from the final quarter shows significant heifer retention, the prospects for herd growth in 2027 also will be limited.
Without heifer retention, the clock does not start on the timeline to anticipate the peak in prices and the duration of elevated prices, Peel said. It looks increasingly like that the peak is being pushed into the last part of the decade.
HOW HIGH WILL THEY GO?
Increasingly, cattle producers, consumers, and policymakers are asking how high cattle prices will go; when will they reach a peak; and what happens after the peak, Peel said. Questions about the cyclical peak in cattle prices and the trajectory of prices past the peak depend on factors that are still unknown.
Analysts do not have a definitive indication of a cyclical bottom in cattle inventories – let alone the path of herd rebuilding to follow, he said.
The only direct heifer-retention data was the mid-year Cattle (Inventory) report, which showed the lowest beef replacement heifer inventory in the history of that particular data set, Peel said. The 2025 US calf crop is projected to be the lowest since 1941 leading to the lowest ever July estimate of feeder cattle supplies outside of feedlots.
Industry response to rising cattle prices has been uncharacteristically slow, he said. The sharp decrease in beef cow slaughter (down roughly 40% since 2022) is enough to stabilize the cow herd.
The beef cow inventory could be fractionally larger in 2026, Peel said, but the small beef replacement heifer inventory (down about 27% from the cyclical peak in 2017) means prospects for 2026 herd growth are very limited. Unless heifer retention accelerates late in 2025, herd growth in 2027 also will be limited.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $236.69 per cwt to $237.11, compared with last week’s range of $230.70 to $241.00 per cwt. FOB dressed steers and heifers went for $365.20 per cwt to $365.50, compared with $360.27 to $375.71.
The USDA choice cutout Monday was down $1.66 per cwt at $363.91 while select was up $3.36 at $349.75. The choice/select spread narrowed to $14.16 from $19.18 with 124 loads of fabricated product and 49 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $423.38 per cwt, and 50% beef was $144.38.
The USDA said basis bids for corn from feeders in the Southern Plains were down $0.05 to $0.10 at $0.90 to $1.15 a bushel over the Dec corn contract, which settled at $4.10 3/4, down $0.02 1/4.
No live cattle delivery notices were posted.
The CME Feeder Cattle Index for the seven days ended Friday was $369.00 per cwt, up $1.08. This compares with Monday’s Oct contract settlement of $375.50, unchanged.