An ag economist says the cattle industry continues to look for any signs of herd expansion. Charley Martinez with the University of Tennessee says, “We want to know the percentage of heifers being held back, that’s really what everyone is wanting to know.”
He says state breakdowns continue to be important. “In the last report, for the first time in a long time, Texas was not the number one cattle feeding state. We want to see if that continues to hold true because we know that New World screwworm is having an impact and it is part of the reason why we saw that.”
Martinez says that the most recent report and the next Cattle Inventory report will provide better insight into the industry’s direction. “Are we still in slight liquidation, are we still in a holding pattern. I don’t expect to see any rebuilding nationally, but there might be some states that have had an increase in numbers for year-over-year changes.”
According to USDA, cattle marketings rose last month, driven by aggressive packer demand and tightening supplies.
USDA says December 2025 marketings were up 2% from a year earlier at 1.773 million head, with the biggest gains in South Dakota, Washington, and California.
The available supply of ready numbers will stay tight in the coming months, which is expected to continue to support strong prices. However, December placements into feedlots were 5% lower than the year before at 1.554 million head, with the bulk of those cattle weighing less than 800 pounds.
The total number of cattle on feed in the U.S. on January 1st was 3% below a year ago at 11.45 million head. Heifers and heifer calves in U.S. feedlots saw a slight increase from quarter-to-quarter while remaining lower than last year, while steer and steer calves were down on the quarter and the year.
Marketings were about as expected heading into the report, while placements and the on-feed total were towards the high end of estimates.
EDITOR’S TAKE:
What does all this mean? Supply is shrinking, demand remains strong, and prices at both the farm and consumer levels will remain high. Good news for cattle producers, not so good news for consumers. Without placing more heifers into the overall U.S. cattle herd – expansion will not occur. The other limiting factor is the New World Screwworm situation that limits imports from Mexico, traditionally a supplier we depend on year after year.
The Trump Administration continues to seek ways to improve grocery affordability. One recent suggestion was to increase imports of beef from Brazil and Argentina. Apparently, that has not had a real impact to date. The real answer continues to be expanding our domestic herd.
Once again, we recommend you put livestock producers in your area at the very top of your ag customer prospect list. They will be looking for tax advantages this year and next. With the ability to use 100% depreciation this year, this should be a huge sales point with farmers/ranchers – especially livestock producers!
