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FARM BUREAU ECONOMIST: ECONOMICS OF U.S. BEEF AND CATTLE MARKET
Nov. 3, 2025
By Bernt Nelson, Economist, American Farm Bureau Federation
U.S. cattle farmers have faced significant challenges in recent years, from COVID-19-related supply chain disruptions, low cattle prices and persistent drought conditions to growing threats of invasive pests and diseases, a decades-low supply of beef cows and historic inflation in production costs.
For the first time in a long time, cattle ranchers, backgrounders, stockers and cow-calf producers are experiencing dependable economic returns, allowing them to rebuild working capital and consider restocking America's beef herd. However, record-high production costs make efforts to grow the cattle herd more difficult. Those efforts are also sensitive to interventions in the market designed to lower consumer beef prices, which have the unintended consequence of lowering the prices paid to U.S. cattle farmers.
Supplies
Right now, positive economic returns could provide farmers and ranchers incentives to rebuild the cattle herd, but if prices fall, and returns disappear, the cattle herd could continue contraction.
The roughly 10-year expansion and contraction in the U.S. cattle herd in response to perceived profitability is called the cattle cycle. The U.S. is currently in year 12 of the cattle cycle and year seven of cattle herd contraction. At 86.7 million head, U.S. cattle supplies were at their lowest in 74 years on Jan. 1, 2025, due to unprofitable prices, persistent drought, and record costs to raise and feed cattle.
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