With no evidence the US cattle herd has begun to expand again after years of decline, at least one specialist is saying it could begin within the next two years, but there’s a potential catch.
Wesley Tucker, University of Missouri Extension agricultural business specialist, succession planner and national conference speaker, last week authored an article for the Missouri Ruralist called “Cattle Prices Climb; Farmers Fear Fallout.” In the article, Tucker said, “The data suggests beef producers should brace for significant expansion in cow numbers in 2026.”
But how the predicted recovery in cattle numbers plays out could have a very negative effect on cattle prices, and the lessons of the last cattle cycle recovery could serve as the warning. US cattle producers have become very productive and more willing to respond to market cues.
“We’ve all heard the old saying,” ‘The cure for high prices is high prices,’ Tucker said. And “fresh on many beef cattle producers’ minds is the rapid rise of prices in 2014-15, followed quickly by the bottom falling out in 2016.”
HERD DECLINE SLOWING
Although the rate of decline in the US cattle herd appears to be slowing based on beef cow and heifer slaughter so far this year, Tucker said MU’s Food and Agricultural Policy Research Institute projected the Jan. 1 USDA Cattle (Inventory) report could show another year-over-year decline. After that, herd expansion was predicted through the Jan. 1, 2032, report.
The Jan. 1, 2026, report could show a slight increase in herd numbers, but the predicted rise in 2026 herd growth won’t be measured until Jan. 1, 2027, he said.
Tucker compared FAPRI’s blend of the current cattle cycle numbers and prediction with the 2010-2022 cycle and found a similar beginning to the cycle but a far different ending. What was expected to be a soft landing with a gradual expansion in response to higher prices turned out to be one in which cow/calf producers held on to “every beef cow who had at least half a working udder and one good eye left in her head.
“In addition, heifers on feed plummeted as producers retained large groups of heifers to grow the herd as quickly as possible,” Tucker said.
THE ELEPHANT IN THE ROOM
Tucker said, the questions on everyone’s mind now are:
–Will this cattle cycle be different than the last?
–How soon will high prices vanish and be replaced by lower ones?
Anything is possible, but “there is a chance that other factors such as technology, weather and labor delay expansion and keep prices skyrocketing,” Tucker said.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $188.00 per cwt to $198.00, compared with last week’s range of $188.00 to $200.95 per cwt. FOB dressed steers, and heifers went for $296.46 per cwt to $302.88, compared with $297.15 to $309.23.
The USDA choice cutout Wednesday was down $0.53 per cwt at $312.68 while select was down $2.70 at $293.96. The choice/select spread widened to $18.72 from $16.55 with 158 loads of fabricated product and 29 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $380.94 per cwt, and 50% beef was $146.45.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.56 to $1.78 a bushel over the Sep corn contract, which settled at $4.03 3/4 a bushel, up $0.01 1/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $258.39 per cwt, up $0.65. This compares with Wednesday’s Aug contract settlement of $257.12, down $1.62.