USDA Cattle Data Shows the U.S. Herd Has Stopped Shrinking

There were 94.2 million head of cattle and calves on U.S. farms as of July 1, according to last Friday afternoon’s USDA cattle inventory report. Of the 94.2 million head inventory, all cows and heifers that have calved totaled 38.1 million. There were 28.5 million beef cows in the United States as of July 1, down 1% from last year. The number of milk cows in the United States increased to 9.65 million. The U.S. calf crop was estimated at 32.5 million head, down 2% from 2025. All cattle on feed were at 13.2 million head, up 2% from 2025. The USDA surveyed over 17,400 operators across the nation during the first half of July. 

“USDA’s July 1 count edges higher for the first time since 2018 and beef replacement heifers climb 3%, but a still-shrinking cow herd, the smallest calf crop since 1941 and feedlots running ahead of their supply line point to tighter beef supplies — and a later, slower rebuild — through 2028. Trade resumes Monday with feeder cattle and deferred live contracts best positioned to firm,” said a report from Jim Wiesemeyer of Ag Bull Media. “The tension in Friday’s data is the cattle cycle’s oldest paradox: the same heifer retention that marks a bottom takes cattle away from feedlots and packers first and adds beef last. If ranchers are indeed beginning to hold heifers, feeder cattle supplies — already down 1% outside feedlots — get tighter before a single additional calf reaches a packing plant,” said the report.

Meantime, Friday’s monthly USDA cattle-on-feed report showed U.S. cattle and calves on feed for the slaughter market for feedlots with capacity of 1,000 or more head totaled 11.4 million head on July 1. The inventory was 2% above July 1, 2025. The inventory included 7.12 million steers and steer calves, up 3% from the previous year. This group accounted for 63% of the total inventory. Heifers and heifer calves accounted for 4.25 million head, up slightly from 2025. 

Placements in feedlots during June totaled 1.40 million head, 3% below 2025. Net placements were 1.35 million head. During June, placements of cattle and calves weighing less than 600 pounds were 325,000 head, 

Marketings of fed cattle during June totaled 1.66 million head, 3% below 2025. Marketings were the lowest for June since the series began in 1996. 

All the numbers in the monthly cattle-on-feed report contained no big surprises to traders. “The 2% rise in cattle on feed reflects cattle staying in feedyards longer, not more cattle entering the system. That makes the report meaningfully less bearish than its headline: feedlots hold a large near-term supply of finished cattle, but the flow of replacements behind them is shrinking,” said Wiesemeyer in his report.

The USDA cold storage report on Friday showed total red meat supplies in freezers were down 1% from the previous month but up 3% from last year. Total pounds of beef in freezers were down 3% from the previous month and down 3% from last year. Frozen pork supplies were up 1% from the previous month and up 9% from last year. Stocks of pork bellies were down 3% from last month but up 18% from last year.

Friday’s price action in live (LEQ26) and feeder cattle (GFQ26) futures markets saw August live cattle futures rise $1.675 to $227.075 and for the week up $2.65. August feeder cattle futures gained $1.55 to $345.325 and for the week were down 62 1/2 cents.

The cattle futures markets on Friday saw some follow-through buying from Thursday’s rebounds. Two sessions in a row of decent gains in the cattle futures markets, including Friday’s bullish weekly high close in August live cattle, are early clues the bears may finally be exhausted, and market bottoms might be in place. Still, the futures market bulls are still timid amid falling cash cattle prices.

The USDA at midday Friday reported active cash cattle trading, with steers averaging $230.37 and heifers $230.08. The agency reported average cash cattle trading the week prior at $238.28. 

Softening cash cattle prices and boxed beef values may continue to weigh on futures in the coming weeks, as fed cattle prices have declined in recent weeks amid seasonal summer demand weakness. Signs of demand destruction have triggered significant speculative liquidation, pushing futures to fresh near-term lows. Rising beef imports are also pressuring the futures market. Packer margins remain negative, which is likely to keep slaughter volumes in check.

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