The USDA National Agricultural Statistics Service (NASS) released its Cattle report on Jan. 31. The total of all cattle and calves on Jan. 1, 2025, was estimated at 86.662 million head, about 0.5 million fewer than the previous year. This marks the sixth year of contraction for aggregate beef and dairy cattle inventories and the 11th year overall of the current cattle cycle – the cyclical expansion and contraction of the national cattle herd over time. The cycle is influenced by the combined effects of cattle prices, input costs that drive cow-calf producer profitability, the gestation period for cattle, the time needed for raising calves to market weight and climate conditions.
Beef cows, the largest class of cattle estimated in the Cattle report, are particularly affected by the factors affecting the cattle cycle and the subsequent driver of year-to-year changes in cattle inventory. The number of beef cows on Jan. 1 declined 0.5% from last year to 27.864 million head. The culling rate of beef cows in 2024 was more than 10% of the beef cow inventory on Jan. 1, 2024, a 2 percentage point decline from last year and the lowest since 2019.
Estimated retention of beef heifers was only 4.672 million head, 1% less than last year. For additional context, the number of beef cows is down 39% from the historic peak set in 1975 of 45.712 million head and is the smallest beef cow inventory since 1961. As the number of beef heifers available for addition to the herd is correlated to the size of the beef cow herd and the previous year’s calf crop, beef heifer replacements also peaked in 1975 at 8.884 million head and have since fallen 47%. In the last three cattle cycles, including the beginning of the current cycle, the percent of beef heifers kept for replacements in the coming year has had several years of year-over-year increasing proportions compared to the previous year's calf crop (Figure 1). If the same pattern holds in the future, it could be several years from now before the U.S. cattle herd expands. Biologically speaking, many of the offspring from heifers born in 2024 would not enter the beef cow herd until the 2027 Cattle report. Historically high prices for calves likely encouraged many producers to market their heifer calves to the feeder market in 2024.
The 2024 calf crop estimate is larger than previously expected as the ratio of calves to cows is nearly 90%, the highest since 2004. This has contributed in large part to the relatively large share of calves under 500 pounds at 13.458 million head, down just 29,600 head from 2024. Steers 500 pounds and over were estimated at 15.802 million head, down 156,800 head from 2024, and other heifers 500 pounds and over were estimated at 9.593 million head, down 57,300 head from 2024. It was further noted in the Cattle report that the number of cattle on feed in total feedlots was estimated at 14.297 million head, down 129,600 head from last year.
Based on the number of cattle on feed and the number of calves, steers and other heifers on Jan. 1, it is estimated there are 24.557 million head of cattle outside of feedlots available for placement at the beginning of the year. This is only 114,000 head fewer than last year, and it is noteworthy considering the import ban on cattle from Mexico since late November 2024. From 2019-23, the number of feeder cattle imported from Mexico in the month of December averaged more than 134,000 head.
Figure 2 shows the number of cattle outside feedlots on Jan. 1 and the corresponding cattle placed in feedlots in the first quarter as a percent of the number outside feedlots as of that date. This gives a sense of the cattle available and what is typically placed in the first quarter; however, this time there will be additional cattle in the mix as Mexico feeder calves begin to rejoin the supply chain – albeit at a slower pace than the number that might typically cross the border in February and March.
Beef production outlook raised on resumption of cattle, imports from Mexico and heavier expected carcass weights
Reflecting on beef production in 2025, there are several components to examine, including the number of cattle on feed, the number of calves expected to be placed in the first half of 2025 and days on feed as it relates to cattle weights. With respect to the first part, the latest NASS Cattle on Feed report estimated Jan. 1 inventory of cattle in feedlots of 1,000 head or greater to be 11.823 million head, almost 1% below 11.93 million head in the same month last year. Feedlot net placements in December were more than 3% lower year over year at 1.583 million head. Marketings in December were 1.742 million head, up 1% year over year.
With respect to the number of placements anticipated in 2025, on Feb. 1, the USDA Animal and Plant Health Inspection Service announced the resumption of cattle and bison imports from Mexico under a new protocol. At the time of the release of the current USDA World Agricultural Supply and Demand Estimates, only two border crossings are available: Santa Teresa, New Mexico, and Douglas, Arizona. The handling of cattle imports under the new protocol is expected to be slow at first. The number of head crossing the border will require time for processing seasonal volumes and the holdover of cattle that might have crossed since late November. Weekly volumes may not reach year-ago levels, so feeder cattle import volumes are expected to be less than last year. In addition to Mexican feeder calves reentering the U.S. supply chain, there was a relatively larger-than-expected number of calves under 500 pounds on Jan. 1, increasing feeder cattle supplies for potential placements.
The number of cattle on feed over 150 days on Jan. 1 was down 0.5% from year-ago levels; however, the percent on feed over 150 days was up 0.4% above year-ago levels, based on a slowing pace of placements and a relatively strong pace of marketings in late 2024. The relatively low feed costs and the ability to feed cattle to heavier weights support continued longer periods on feed than historically.
As a result, the projection for 2025 beef production is raised 775 million pounds from last month to 26.565 billion pounds, which is almost 2% below 2024. The first quarter is unchanged from last month, as an increase in expected carcass weights offsets a pullback in cattle slaughter. In the second quarter, an increase in production is primarily due to an increase in expected carcass weights. Higher production forecasts for the third and fourth quarters is due to higher expected carcass weights and increased steer and heifer slaughter from the larger-than-expected number of calves outside feedlots on Jan. 1, along with the reintroduction of Mexican feeder cattle into the mix of cattle expected to be placed in the first half of 2025.
With the inclusion of official slaughter and production estimates for December 2024, beef production in 2024 is estimated at 26.988 billion pounds, up marginally from 2023. The slight increase in production was driven by an increase of over 3% in average carcass weights from the previous year that was partially offset by a 3% decline in total cattle slaughter.
Price forecasts reflect greater calf supply in 2025
In January, the weighted-average price for feeder steers weighing 750-800 pounds at the Oklahoma City National Stockyards was $274.45 per hundredweight (cwt), a new monthly record and more than $48 above January 2024. However, since the announcement of resumption of cattle imports from Mexico, feeder cattle prices have dropped considerably. After reaching a weekly record price of $277.84 per cwt on Jan. 27, prices have dropped more than $8 to $269.82 per cwt on Feb. 10, but are still more than $26 above the same week last year (Figure 3).
In addition to incorporating the resumption of feeder cattle imports into the forecast, the Cattle report showed more head than previously expected outside feedlots on Jan. 1, albeit still less than a year ago. The increase in the cow-calf ratio was carried over into 2025 expectations, increasing prospects for a larger than previously expected calf supply in 2025. Based on current prices, first-quarter prices are raised by $4; however, the increase from last month for feeder calf supply available in 2025 lowered third- and fourth-quarter prices by $2 from last month. As a result, the price outlook for 2025 is $273.75 per cwt, an increase of nearly 9% from 2024.
The January average price for slaughter steers in the 5-area marketing region was $204.49 per cwt, $11.05 higher than December and over $30 above January 2024. In the first week of February, prices averaged $207.05 per cwt, nearly $26 above the same week last year. Based on recent price data and the fact that wholesale beef prices are at record levels for this time of year, the 2025 price forecast is adjusted higher from last month, with the annual price projected at $200.75 per cwt, over 7% higher than 2024.
2025 beef export forecast raised on higher production and strong demand
As discussed above, the resumption of cattle imports from Mexico boosts the domestic beef production forecast. With greater expected supplies, the export forecast is similarly raised. This increase also reflects strong global beef demand. Despite higher prices in 2024, exports remained relatively strong, declining only 1%. The beef export forecast for 2025 is raised 200 million pounds from last month to a total of 2.795 billion pounds. This would be a year-over-year decrease of about 7%; it puts exports as a percent of production at 10.5%, compared to 11.1% in 2024.
The strength of demand globally for U.S. beef is evidenced by these sustained strong exports, despite higher beef prices and a strong U.S. dollar. The total value of U.S. beef exports in 2024 was over $9 billion, a year-over-year increase of about 6%. The average unit value of exports increased by about 7%. Additionally, the nominal broad U.S. dollar index, an indicator of the exchange rates of the U.S. dollar against selected foreign currencies, trended higher throughout 2024, especially in the latter months. A stronger U.S. dollar makes U.S. exports more expensive in the global market. However, U.S. beef exports remained relatively strong throughout the year, largely aided by broad growth in some of the mid-sized markets.
Table 1 shows the year-over-year changes in exports to the top six markets. The shares of exports to major markets did not change substantially in 2024. Japan was the largest market for U.S. beef, edging out South Korea slightly. Exports to Mexico and Taiwan increased over the previous year, as did exports to the rest of the world – markets outside the top six.
Figure 4 shows exports to the top 20 of these smaller markets. Beef demand in many of these markets is supported by tourism and the hotel, restaurant and institution sector, as well as growth in middle-class incomes. These markets are perhaps becoming less price sensitive, supporting demand for high-quality U.S. beef even at the stronger prices seen throughout 2024. Exports to the Philippines represented the largest increase in exports to these smaller markets, up over 14 million pounds, or 44%, year over year. The USDA Foreign Agricultural Service report Food Service – Hotel Restaurant Institutional Annual (HRI) for the Philippines in December notes that they expect to see continued food service sales growth as the sector recovers to pre-pandemic levels. The annual HRI reports for Indonesia, Dominican Republic, Singapore, Vietnam and Panama echo similar sentiments of expanding HRI industries and growing or recovering tourism.
2024 trade data finalized; 2025 import forecasts remain
Unchanged U.S. beef imports in December totaled nearly 400 million pounds, a 30% year-over-year increase. Monthly imports from Australia reached over 131 million pounds, an increase of nearly 69% over last year and the largest monthly shipment from the country since 2015. Exports from Brazil were also higher year over year, though down sharply from November as the product was likely staged in bonded warehouses to be imported on Jan.1, when the tariff-rate quota reopened for the 2025 calendar year.
Total U.S. beef imports for 2024 were 4.635 billion pounds, a year-over-year increase of about 24%. Annual imports from Australia reached over 1.1 billion pounds, making it the largest supplier of beef to the U.S. for the first time since 2016. Table 2 shows how the import shares shifted in 2024. Imports from Canada were fairly level year over year, decreasing less than 1%. However, the share of imports from Canada decreased to 22% as the shares from Australia and Brazil increased substantially. The share of imports from countries outside of the top five suppliers increased as well. These countries include Uruguay, Paraguay, Argentina and Costa Rica, which combined accounted for an increase of 213 million pounds for the year.
The import forecast for 2025 remains unchanged from last month at 4.77 billion pounds. If realized, this would represent about a 3% increase year over year. Figure 5 shows the quarterly forecasts for 2025. Each quarter is expected to be slightly above 2024 and expected to follow a similar seasonal pattern.
