WASHINGTON, D.C. – The USDA’s July 1 cattle inventory showed a continued tightening of herd numbers, with both the cattle inventory and cattle-on-feed numbers down, said Grant Dewell, Iowa State University beef extension veterinarian, analyzing the agency’s July 1 Cattle Inventory Report.

Moreover, the July 1 USDA Cattle on Feed Report, released along with the cattle inventory report July 25, indicated the total number of cattle in feedlots with a capacity of 1,000 or more head showed 11.1 million cattle on feed, the lowest since 1996, according to the USDA.

The USDA Cattle Inventory Report is released in late January and late July annually. However, the USDA canceled the July cattle reports in 2013, 2016 and 2024, due to agency budget cuts. The July report reflects numbers as of July 1, and the report released, and reinstated, July 25, showed comparisons to July 1, 2023, and July 1 of previous years.

“The July 1 cattle numbers are a little difficult to make conclusions from as we did not have a (July cattle) report last year, so we are making comparisons to two years ago, and we had a lot of liquidation during that time, so it’s difficult to see what the trend is,” Dewell told Farm World.

“It is down from two years ago, but we don’t really know what the shape of the curve is in giving clues if we are approaching the bottom of the cattle cycle or not,” he said. “There is some evidence that we may be starting to build the herd, but we will have to see if it plays out. Looking at the numbers, compared to Jan. 1 (2025) numbers, we are seeing more cattle and beef cows, compared to six months ago.”

He added, “That is potential evidence that we may be turning the corner, but we will need to wait until January (2026) after all the culling decisions this fall to see if those numbers hold. Looking at the cattle-on-feed numbers, we see a little reduction in the number of heifers on feed, compared to 2024, so again, a little evidence that maybe we are going to start rebuilding the herd.”

The report said there were 94.2 million head of cattle and calves on U.S. farms as of July 1. There are 28.7 million U.S. beef cows, and the number of U.S. milk cows is 9.45 million head. The U.S. calf crop was estimated at 33.1 million head, and all cattle on feed were at 13 million head, the report added.

Andrew P. Griffith, University of Tennessee professor of agricultural and resource economics, told Farm World, “The biggest surprise to me was the size of the calf crop. I find it hard to believe the calf crop is only 1.4 percent lower than two years ago. The cow herd has been declining over the past two years, with a huge cow slaughter in 2024, as well as a large number of heifers on feed during that time.

“In essence, I would have thought the number of beef cows and the calf crop would have been much smaller than what the USDA estimates, but we have to remember it is an estimate based on a survey that covers a small number of producers,” he said.

He added, “This report will certainly continue to support calf and feeder cattle prices. It may be bearish (an expectation that prices will fall) to feeder cattle futures for a short time, but I have a feeling the futures market will rebound rather quickly if it takes a dip. I don’t think the cash market will change all that much.

“I do think we will see an increase in the quantity of heifers held for beef replacement come Jan. 1, 2026,” he said. “It will not be a large increase, but an increase nonetheless. We may even see a slight increase in the all-cattle and calves numbers, but it will also be a small increase.”

Derrell Peel, Oklahoma State University extension livestock marketing specialist, said in his analysis, “The comparison of July to January beef replacement heifers was about the same as two years ago, and does not indicate heifer retention. From the other inventory categories, the estimated supply of feeder cattle outside feedlots is 34 million head, the lowest in 29 years of available data.

“Taken together, the July Cattle on Feed and the Cattle reports do not indicate significant heifer retention,” he said. “My feeling is that some movement toward herd rebuilding may be starting, but is very slow and cautious. It is possible, perhaps even likely, that the January 2025 beef cow herd will be the cyclical low, but the January 2026 inventory will likely be close to unchanged, showing very little, if any, growth this year.”

Dewell said, “Expect prices for calves this fall to remain strong. Overall, we are at the lowest point in recent history for cattle numbers, which is keeping prices up. The calf crop is down about 1 percent, so cow-calf producers should see another year of strong revenue. The number of cattle on feed is down about 2 percent, which is lower than expected, so feeders will be forced to pay high prices to fill pens.

“This is especially true when you look at placements in June, which were down 8 percent, compared to 2024,” he added. “Feeders have been feeding cattle longer, keeping inventories high, but not placing many cattle. Looking at the placements by state, Texas, Oklahoma and Nebraska were down, while Kansas and Iowa were at 121 percent (of the previous year’s level).”

He said, “The closed border due to New World screwworm (NWS) is definitely hampering the Panhandle feedyards from sourcing enough cattle, with no sign of relief now that NWS is less than 400 miles from the border. Expect calves to start moving south as those yards seek to fill pens without Mexican cattle.”