By Emmy Powell
Communications Specialist
The latest cattle inventory report from the U.S. Department of Agriculture (USDA) shows the nation’s cattle herd may be entering the early stages of stabilization.
All cattle and calves in the U.S. on July 1 totaled 94.2 million head, up 200,000 head from July 2025. It marks the first increase in the July cattle inventory report since 2018.
“We’re starting to see early signs of stabilization in the cattle herd, but it’s not a full rebuild yet,” Tracy Tomascik, Texas Farm Bureau associate director of Commodity and Regulatory Affairs, said. “Ranchers are beginning to retain more replacement heifers, which is an encouraging signal, but the beef cow herd remains at a record low.”
USDA estimated the beef cow inventory at 28.5 million head, down 1% from last year and the smallest July inventory on record.
Milk cows totaled 9.65 million head, up 2%, while all cows and heifers that have calved were unchanged at 38.1 million head.
Replacement heifers signal rebuilding
One of the strongest indicators of future herd expansion was the increase in beef replacement heifers.
The inventory of beef replacement heifers weighing more than 500 pounds totaled 3.8 million head, up 3% from last year.
This is the first significant increase in replacement heifer numbers in nearly a decade. That suggests some ranchers are beginning to retain females for breeding rather than sending them to market, Tomascik said.
Record-low calf crop limits growth
The 2026 calf crop is projected to be the smallest on record.
USDA estimates the 2026 calf crop at 32.5 million head, down 2% from 2025 and marking the ninth consecutive annual decline.
Those calves will become the feeder cattle supply in the coming years, meaning tight supplies are expected to continue into 2027.
Cattle on feed
USDA’s July Cattle on Feed report showed 13.2 million cattle and calves on feed across all U.S. feedlots on July 1. Large commercial feedlots accounted for 86.2% of that total. June placements declined 3% from a year ago, continuing a trend of fewer cattle entering feedlots.
Lower placements, combined with the smaller calf crop, point to continued tight feeder cattle supplies over the next several years. However, cattle are remaining in feedlots longer and being marketed at heavier weights, partially offsetting lower overall cattle numbers.
Mexico border reopening
Economists noted the gradual reopening of the U.S.-Mexico border to feeder cattle imports is expected to provide some relief to tight cattle supplies.
Imports from Mexico were halted in late 2024 following the detection of New World screwworm. USDA recently announced a phased reopening of select ports of entry with additional inspection and treatment protocols in place to help prevent the spread of the pest.
Market outlook
While long-term cattle supplies remain historically tight, markets are balancing several competing factors.
Recent declines in boxed beef values and the gradual return of Mexican feeder cattle have created some near-term pressure on cattle prices, even as limited supplies continue to support the market over the longer term.
“Tight cattle supplies continue to provide long-term support for cattle prices,” Tomascik said. “At the same time, markets are balancing softer beef demand and the gradual reopening of cattle imports from Mexico, so ranchers should expect some volatility in the months ahead.”
About the survey
About 17,400 operators across the nation were surveyed during the first half of July.
Surveyed producers were asked to report their cattle inventories as of July 1, 2026, and calf crop for the entire year of 2026 by internet, mail or telephone.
USDA will release its next inventory report in January.
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