– Josh Maples, Assistant Professor & Extension Economist, Department of Agricultural Economics, Mississippi State University
Strong prices and tight supplies of cattle were the theme for 2025 and that remains the setup for 2026 after the annual USDA Cattle inventory report was released last Friday. This report provides the most comprehensive look at cattle inventories of the year and was much anticipated this year as the sector looks for signs of herd expansion. Instead, the report showed further contraction during 2025 and the smallest January 1 beef cow herd since 1960.
Total cattle and calves (including dairy) as of January 1, 2026 were reported at 86.155 million head. This was down 0.37 percent from a year ago and is the seventh consecutive year of decline. The 2025 calf crop also declined for the seventh consecutive year and was estimated at 32.896 million head, a 1.56 percent decrease from 2024. Both of these points were within the range of pre-report estimates, but on the low end. The 2025 calf crop was 3.39 million head smaller (9.3 percent) than it was during 2018 which was the peak year for this current cattle cycle.
The number of beef cows was the biggest surprise in the report. The estimated number of beef cows on January 1, 2026 was 27.607 million head which was 1 percent below a year ago. Most pre-report estimates were for the number of beef cows to be unchanged or slightly above year ago levels due to the lower level of beef cow slaughter last year. 2026 began with 4.03 million fewer beef cows than we had in 2019 (the last peak) which is a 12.7 percent decline.
The number of heifers held for beef cow replacements was 4.714 million head which is a 0.89 percent increase from a year ago. This was on the low end of pre-report estimates. This is the first annual increase in beef heifers in a decade, but still a very low total and not a clear signal of herd expansion. This may signal herd stabilization, but not yet expansion. The bulk of the increased heifer retention occurred in Texas which added 50,000 heifers for beef cow replacement while the U.S. overall added 41,700. If more heifer retention occurs in 2026, it will be interesting to track the regional differences in where that growth happens.
State level inventories declined for Mississippi and Kentucky. Total cattle and calves in Mississippi declined by 1.2 percent to 800,000 head and in Kentucky declined by 1.1 percent to 1.82 million head. Arkansas total inventory held steady at 1.56 million head. The 2025 calf crop declined by 1.3 percent in Arkansas to 740,000 calves and declined by 3.4 percent in Kentucky to 860,000 head. The calf crop in Mississippi was unchanged from 2024 at 345,000.
This was a bullish report for cattle markets. The possibility of widespread heifer retention in 2025 and an increase in the beef cow herd did not materialize. 2026 will be another year of tight inventories of cattle and plenty of support for prices from the supply side of the market. Beef demand will be important as always and has been very strong recently. Overall, the fundamentals suggest continued high cattle prices in 2026.