U.S. Cattle Herd Hits Historic Low as Rebuilding Remains Elusive
The U.S. cattle herd has dropped to its lowest mid-year count since 1973, intensifying pressure on beef prices and shaking the supply chain. While ranchers appear poised to rebuild, the pace is glacial, and combined with import restrictions from Mexico, the market outlook remains tight well into 2026.
The U.S. cattle inventory continues its historic decline, with the July 1 count falling to 94.2 million head, the lowest mid-year level recorded since 1973, according to the latest USDA report. While some signals suggest the liquidation cycle may be slowing, the industry remains far from recovery-putting sustained pressure on beef prices and squeezing margins for producers and processors alike.
Feedlot placements have plunged to their lowest levels since 2017, reflecting not only smaller herd size but also a lack of replacement heifers. Industry experts note this absence of aggressive restocking. "We're probably stabilizing cattle numbers, but we're not growing yet," said Derrell Peel, agricultural economics professor at Oklahoma State University.
Data Provided by the USDA
For years, high input costs, interest rates, and widespread drought led ranchers to slash their herds, and now the consequences are fully visible. The U.S., the world's largest beef producer, is struggling to meet demand-driving up grocery store beef prices and cutting deeply into profits for packers like JBS and Tyson Foods.
Kevin Good of CattleFax notes that heifer retention is showing early signs of improvement. Heifers on feed now account for 38.1% of placements, down from 39.4% last year, indicating some females are being held back for breeding. Still, Good cautions, "Turnaround is going to be very slow."
Compounding the domestic supply issues are ongoing restrictions on cattle imports from Mexico, imposed in late 2024 due to New World Screwworm outbreaks. Mexico is the fourth-largest beef supplier to the U.S., accounting for 13% of imports last year. Analysts warn that the suspension is likely to remain in place through 2026, tightening supplies further.
With U.S. production down, beef imports have surged to record levels, hitting 4.635 billion pounds in 2024-a 24% increase over the previous record. Imports from Australia, Brazil, and New Zealand are helping fill the gap, especially in lean beef trim for the hamburger and food-service sectors. However, proposed U.S. tariffs on imports from these nations-potentially taking effect August 1-could further disrupt the balance.
"This is a major exposure for the food-service industry," said David Maloni, president of supply-chain consultancy Datum FS. "If tariffs are imposed, expect another sharp escalation in beef prices, especially for ground beef and bulk beef trim used in restaurants."
Despite the pressures, ranchers appear cautious about rebuilding aggressively. The 2026 beef cow herd may only show a modest uptick over 2025 levels. Until a clearer expansion trend takes hold, U.S. consumers and ag producers must navigate a tight, costly beef market shaped by both domestic limitations and global volatility.
