The U.S. beef industry is expected to remain strong, even with challenges related to replacement heifers, disease and pest pressure, trade disruption, consumer preferences, sustainability, and global competition.
It is no surprise the USDA’s bi-annual Cattle Inventory Report is estimating a 1% reduction from the year prior for all cattle and calves in the U.S. That finding is mainly a result of three consecutive years of drought pressure throughout major portions of the Western cattle-producing regions.
In addition, the discovery of New World screwworm (NWS) in Mexico has halted cattle imports, further reducing feeder cattle supplies in the U.S. The suspension temporarily resulted in 30,000 head fewer feeder cattle and calves moving north to the U.S. on a weekly basis.
The report, released Jan. 31, has cattle inventory at 86.7 million head, down from 87.2 million a year earlier. It is the smallest beef herd since 1951.
“Currently, beef industry prices are holding strong,” says Ashlee Gibson, Assistant Vice President of Regional Credit for GreenStone Farm Credit Services. “They're trading at all-time highs right now on the Chicago Board of Trade, and we're seeing that all the way through to local stockyards and even contracts. So that's looking really good.”
The beef cow herd has been contracting for the last three years, mainly because of the drought impacts and rising feed costs. It’s uncertain if 2025 will be the year it turns around.
With supply being tight – to some surprise – demand hasn’t waned. “Despite an economic downturn, consumer demand remains robust,” Gibson says. “Even with a slight recession, people are keeping beef in their diet, and it's keeping the prices up.”
Key USDA Cattle Inventory Report Findings:
- Of the 86.7 million head inventory, all cows and heifers that have calved totaled 37.2 million.
- There are 27.9 million beef cows in the United States as of Jan. 1, 2025, down 1% from last year.
- The number of milk cows in the United States increased slightly to 9.35 million.
- U.S. calf crop was estimated at 33.5 million head, down slightly from the previous year.
Michigan and Wisconsin See Increase in Cattle Numbers
Despite the national figures, both Michigan and Wisconsin added 2% more cattle and calves, increasing to 1.11 million head in Michigan and 3.25 million in Wisconsin.
For beef cows that have calved, Michigan dropped 1% to 100,000, while Wisconsin rose 6% to 275,000. Beef cow replacement was up almost 9% to 25,000 in Michigan and rose 18.2% in the badger state to 65,000.
The increases go against a national trend, which reported beef replacement heifers declining 1% to 4.67 million head.
Wisconsin has shown an increasing trend in the number of farms and number of head of beef cattle in Wisconsin since the early 2000s, according to Brenda Boetel and Bill Haffman, University of Wisconsin Extension commodity marketing specialist and beef outreach specialist, respectively.
“Dairy farms transitioning out of dairy and new rural landowners are contributors to this trend,” says Haffman.
With limited replacement heifers being retained, the outlook for the 2025 calf crop looks smaller, according to most industry experts. Expansion is still very tepid. Heifers represent 38.7% of the total on-feed inventory.
Heifer retention in the U.S. is the number of heifers kept to replace beef cows. The number of heifers retained affects the size of the beef cow herd, which in turn affects the amount of beef available.
When heifer retention does pick up, it is expected to further tighten supplies of cattle as those females are held out of the marketing system.
The U.S. has had record-heavy carcass weights on a weekly basis since early March. This increase in pounds largely offset the decrease in female slaughter and resulted in steady beef production levels for 2024.
Cattle Imports from Mexico Resume
Cattle imports from Mexico have since resumed under protocol involving inspection, injection with Ivermectin and quarantine in Mexico before being cleared to move to approved U.S. ports, where they are quarantined and inspected again, according to USDA.
The USDA has long partnered with Central American countries to keep livestock and wildlife pests like NWS from moving north from South America.
The U.S. eradicated screwworms in 1966, but isolated screwworm infestations were detected in the U.S. in 1982 and 2016.
U.S. beef exports have been important for the industry, especially to markets like Japan, South Korea, and China. Global trade dynamics and trade agreements will continue to play a critical role, experts advise. Trade policies, geopolitical tensions, and consumer preferences in key markets will shape the export outlook.
Beef exports have been lower in recent years due to tight domestic supplies and high prices, but the U.S. still exported the equivalent of roughly 11% of production last year.
