Wild Ride: Cattle Prices on a Roller Coaster
- Jeff Ishee
- Oct 30
- 2 min read
Updated: Oct 31
Source American Farm Bureau; Bernt Nelson, Economist
October 29, 2025 - 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.
Drought and Pasture Conditions
Pastures are where the nation’s breeding cattle are raised. Good pasture conditions lower the costs of raising a healthy breeding herd. Drought, especially on-going drought, damages pasture long-term and drives up costs for ranchers, who have to ship in hay from other parts of the country. Deteriorating pasture conditions were a big factor in farmers’ decisions to place female cattle on feed from 2021-2023, rather than keeping them to produce calves. Higher numbers of female cattle going to market led to the drop in the cattle inventory and fewer cattle available for beef production.
Rebuilding the cattle herd takes a long time. If a farmer decides today to keep a heifer instead of placing it on feed for market, it will take 30 months before that heifer produces a calf that creates meaningful growth in the cattle herd, putting us in 2028 before cattle supplies reflect that decision. However, if cattle prices fall and farmers can’t make a profit, they may market females, leading to fewer cattle supplies available for beef in the long run. For many ranchers, the past several years have included painful decisions. When ponds and springs dried up, some hauled water by the truckload just to keep animals alive a few more weeks. Others paid record prices to bring in hay from hundreds or even thousands of miles away, often spending more on freight than on the feed itself. Selling off breeding cattle wasn’t just an economic decision, it was an emotional one, representing years or even generations of herd development lost in a single season. Drought has forced families to part with genetics they had spent decades refining, knowing it could take years to recover what was sold in a matter of weeks.
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