The latest U.S. Department of Agriculture cattle inventory report delivered another clear signal that the U.S. beef herd has yet to turn the corner, and Texas remains central to the story, said Texas A&M AgriLife Extension Service experts.
Nationally, the number of beef cows dropped just over 1%, a sharper decline than many market analysts expected, said David Anderson, Ph.D., AgriLife Extension economist in the Texas A&M Department of Agricultural Economics.
In Texas, the nation’s largest beef- producing state, cow numbers dipped by about 30,000 head, but producers held back 50,000 more heifers — an 8% increase in replacements that could signal the early stages of a slow rebuild, Anderson said.
He said strong calf prices and historically tight cattle supplies continue to shape producer decisions about growing their herds.
“That suggests we’re bottoming out — holding a few more replacements for future growth,” Anderson said. “But there’s nothing here that suggests rapid growth.”
A slower rebuild and tighter cattle supplies will continue to ripple from cowcalf operations to feedlots and packers, all the way to grocery stores, Anderson said.
Beef herd numbers signal slow rebuild
The rebuild process appears far more measured than past post-drought recoveries, said Jason Cleere, Ph.D., AgriLife Extension beef cattle specialist in the Texas A&M Department of Animal Science. Heifer retention ratios are trending upward across many regions of the state, yet high prices are causing some ranchers to weigh shortterm returns against longterm herd growth.
Bred-heifer values reaching $4,000–$5,000 have created an incentive for producers to sell rather than hold on to calves, he said.
“There’s pressure to just sell them and take advantage of the market and then worry about rebuilding next year,” he said. “Many producers also remember the last rebuild — how fast it went and how fast prices plummeted afterward. They’re just a touch more cautious this time around.”
Texas’ long-term cattle capacity has also been thinned by rapid urban expansion, land fragmentation, and the conversion of quality pasture into solar and other non-agricultural uses. Those losses, Cleere said, translate directly into fewer cows in the statewide and national herd.
Cleere said emerging drought around the state could also influence cattle producer decisions related to their herds.
Historically high prices could go higher
Anderson said the January inventory report is typically a strong indicator for how the year will shape up. Cattle physiology is already shaping the coming years. Most heifers are ready to breed by 15 months, and calves gestate for more than nine months. Calves reach finishing weight in 18-20 months.
Anderson and Cleere expect calf prices could go even higher in 2026 and 2027 due to tightened supplies. Last week, 500-600pound steers were selling for $450 per hundredweight on average in Texas, compared to $326 per hundredweight at the same time last year.
Margins should remain strong for cow-calf producers, potentially even better than last year, supported by lower feed costs and sustained demand, Anderson said. But the year’s outlook for Texas will hinge heavily on how the drought evolves.
“You don’t see a lot of market reaction to the January report, but it’s one that tends to place an anchor for where things are, and that has a longer-term effect on prices,” Anderson said.
AgriLife Extension district reporters compiled the following summaries: Panhandle
The district received various amounts of moisture from snowfall and ice. Average daytime temperatures were higher than the previous week, and the snow melt provided topsoil moisture for small grains, including wheat, oats, triticale and broadleaf cover crops. Overall soil moisture levels were very short to adequate. Hay and supplemental protein were being fed to beef cattle. Cattle were in good condition overall, and some small grain pastures were being grazed. Pasture and range conditions were very poor to good, and winter wheat was mostly fair.
South Plains
The district received moisture in the form of freezing rain and snowfall. Counties reported anywhere from 1.5-6 inches of snow. The topsoil soil moisture levels were adequate due to the recent snowfall. This storm brought frigid temperatures and dangerous wind chills. Most cattle were in good condition, but there were concerns about the freezing temperatures impacting calving. Most cattle were relying heavily on supplemental hay and feed. Producers were preparing for fieldwork and planting as soon as conditions allowed them to access fields.
Rolling Plains
A major winter storm brought several inches of snow and ice across the district with bitter cold temperatures persisting for much of the week. Snow and sleet covered the ground for several days, which delayed fieldwork and provided limited moisture to improve surface soil conditions. Overall soil moisture levels were short. Livestock producers faced significant challenges as wind chills dropped below zero. Supplemental feeding of hay and cubes was widespread, frozen water sources required constant attention, and producers worked overtime to protect newborn livestock. While livestock conditions remained mostly fair to good, some losses were reported during the storm. Winter wheat conditions range from poor to fair due to dry conditions, which limited early grazing potential. Range and pasture conditions remained poor to fair. Temperatures returned to more seasonable levels, with above-average temperatures expected in the coming week, but little chance of additional precipitation needed to support wheat, oats and upcoming spring crop preparation.