Rebuilding the U.S. Cow Herd: A Calculated Climb

Lance Zimmerman is a senior beef industry analyst with RaboResearch Food & Agribusiness and helped provide research and insights for Drover’s State of the Beef Industry report.

Cow liquidation is in the rearview. Heifer retention is underway. The U.S. cattle cycle is officially shifting into rebuild mode, but this recovery will not be a stampede. It’s shaping up as a slow, strategic climb.

Beef processing bottlenecks, persistent drought, soaring feed costs, labor shortages and post-pandemic friction kept cow-calf margins relatively tight from 2016 to 2022. Some of those pressures have eased, but with herd numbers set to grow, others could easily resurface. As producers hold back more heifer calves this fall, herd replenishment remains a cautious and calculated exercise.

Rabobank expects the Jan. 1, 2026, beef cow inventory to be 28 million head, up 200,000 head from the prior year. A second increase of less than 500,000 head is likely over the following year. In short, do not expect dramatic shifts early in this rebuilding effort. From 2024 to 2026, the nation’s beef cow herd will hold relatively steady (see Figure 1).

More meaningful herd growth is forecast from Jan. 1, 2027, into the early 2030s. But even then, the peak inventory projection is likely to be 500,000 to 1 million head below the 2019 highs, and that is not necessarily a bad thing.

Thanks to long-term efficiency gains across the U.S. beef sector, a rebuild topping 30.5 million cows might be more than enough to hit new record high in total production. Per capita beef supplies could reach levels not seen in more than two decades. Still, adding upward of 2.5 million cows during this next phase will be complicated.

According to the latest Farm Journal State of the Beef Industry survey, just 47% of producers are considering expanding their cow herd within the next five years, a four-point drop from last year’s already modest number.

The hesitation is rooted in hard realities. Rising input costs, from fencing and equipment to replacement heifers, are straining budgets. And it is not just the higher price tags. Volatility is adding pressure. Fluctuating expenses are muddying financial planning, tightening cash flow, and making profit targets feel increasingly out of reach.

Access to pastureland is still a sore spot. Prices keep climbing, while land-use restrictions and expanding suburbs are blocking opportunities for cattle producers.

Federal government shifts are not helping morale either. Regulatory red tape and compliance demands already pull significant time and resources. Adding the moving target of trade policy and a maze of new rules, and producers find themselves burning hours to stay current. The burden is exhausting.

Behind much of the fatigue in cattle production lies a familiar challenge: aging producers and a shrinking labor pool. Finding help is tough and getting tougher.

Older ranchers worry about health, longevity and who will take the reins next. Meanwhile, the next generation faces a different battle: securing capital, gaining know-how and finding tenacity that defined those who came before. The grit is there — so are the obstacles.

Given these constraints, can the beef cow inventory forecast outlined earlier really take shape in the coming years? Improving drought conditions and profitability help. Survey responses suggest it will take even more than that.

USDA’s latest Census of Agriculture reveals a clear trend: big cow-calf operations are getting bigger. Since 2012, producers with 200 head or more added 2.2 million cows, a 20% jump. Meanwhile, operations less than 200 head lost 2 million, an 11% drop. The shift was established by 2017 and accelerated into 2022.

Rabobank sees the 2027 census amplifying the trend: big operations getting even bigger. They have the capital cushion to absorb risk and make bold moves without jeopardizing the ranch. That is critical when bred cow and heifer prices push past $4,000 per head in the next few years and calf prices soften as supply grows later in the cattle cycle.

Producer age matters even more in this rebuilding effort. According to the 2022 Census of Agriculture, beef cattle operators now average 58.3 years old, the oldest among all U.S. livestock and poultry producer groups.

Younger ranchers might be more willing to bet bigger during this rebuild. For many families, it’s a natural handoff, an exit lane for older operators to transition decision-making to the next generation. Also, herd expansion could unlock new revenue and pull sons and daughters back into the ranch.

Cow-calf producers stand apart in the beef supply chain as fixed-cost operators in a largely margin-driven sector, but that distinction is blurring.

As herd size grows larger and ranch leadership skews younger, margin thinking will gain ground. Larger producers focus on profit per cow or per acre. Younger ranchers lean into data and strategy.

With volatile market prices and uncertainty surrounding the cattle business, margin-minded cow-calf operators are not just likely to evolve during this cow herd rebuild. They are essential to the U.S. restocking effort.

The State of the Beef Industry Report includes input from nearly 500 beef producers. The annual report provides information to help producers when making decisions. Click here to download the full report.

Source: Drovers & Lance Zimmerman-Rabobank