REDFIELD, Iowa (DTN) -- Cattle producers have experienced highs and lows in 2025, with the highs continuing to be the market prices because of the historical low in the cattle inventory.
The cattle herd is the smallest it has been in more than 70 years, which has helped boost prices. This has also led to a slower rebuild of the herd. Many producers have already culled cows that have problems, but now are reluctant to keep many heifers back or purchase more, because of prices.
Oklahoma State University Livestock Marketing Specialist Derrell Peel said the last time prices were near this high was in 2014 when herds were liquidated mostly because of drought, but the herd was rebuilt quickly after that. He said this time it would take until 2029 to see an impact on herd number if producers started to rebuild now; but the markets still seem to be preventing that.
DTN Livestock Analyst ShayLe Stewart agreed. "There's only one way to properly describe the cattle market in 2025 -- and that's by saying it was truly a record-breaking year in every sense of the word. Record-breaking prices across the entire marketplace -- futures contracts, feeder cattle prices, fed cattle prices, bred cow prices and cull cow prices, too." Profits have been record-breaking in some cases -- but so have volatility and risk.
CURRENT BENEFITS AND RISKS
Cow-calf producers have reaped the benefits of a historically low domestic calf crop, she said. These prices have also been driven higher by the closure of the U.S.-Mexico border as the fear of New World screwworm lingers.
"These producers also faced the challenge of longing to rebuild their cow herds as bred cow prices have easily averaged over $4,000 per head late this fall and early winter, and as the sheer cost to operate remains a heavy burden in and of itself," she added.
For those who elected to take this opportunity in the marketplace to exit the business on what will be remembered as one of the wildest rallies ever seen in the cattle sector, the decision was somewhat easy, as never before has the market extended prices to levels seen in 2025. Stewart said when leverage begins to shift from the grass root level to the feeding sector again, it will be anyone's guess on when prices could touch these thresholds again.
"But on the other hand, for those who are playing the long-term game, this year presented plenty of opportunities to sell -- and sell like never before. But buying cattle, of any kind or class, was the real challenge of the year," she added.
MOVING FORWARD
Peel said prices should remain strong at least into 2027. Price pressure could be seen by the end of the decade if herd growth happens. The great thing about the whole supply side is the demand has continued to be strong.
Meat supplies have stayed somewhat constant because of an increase in carcass weights. The average carcass weight for 2024 was 927 pounds and increased to 944 pounds for 2025. The increase is expected to continue with tight supplies to provide more meat for consumers. The trend of breeding dairy cows to beef bulls has helped provide more beef for consumers as well.
President Donald Trump became involved in the cattle markets through an investigation of beef packers and increasing beef imports. This came with reaction from both cattle producers and the markets. The National Cattlemen's Beef Association CEO Colin Woodall criticized Trump's plan for imports, wanting to let the cattle markets work like they should and not risk the livelihoods of America's cattlemen and women.
The latest Cattle on Feed report released Dec. 19, showed Dec. 1 cattle and calves on feed for slaughter are down 2% from the same time in 2024. Live cattle futures closed higher, as did March feeder cattle following that report. It will be interesting to see what the market does as it moves into 2026.
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