A Few Thoughts by John Nalivka: Beef production continues to fall

I expect beef production to be down 2% during 2025 with a 4% further decline expected in 2026. This forecast is the result of 4% fewer cattle available for slaughter this year followed by a 3% drop in total cattle slaughter during 2026. In terms of slaughter mix, heifers after having accounted for a larger share of the slaughter mix will continue to decline as the year progresses. Year-to-date, the percent heifers in the weekly slaughter averaged 32.8%. This compares to 27.3% for the 2015 -2019 average when cattlemen were expanding herds and 31.2% for the 2022 -2024 average when herd liquidation was taking place.

Looking at the cowherd, cows accounted for 17.1% of the slaughter mix YTD compared to 19.9% for the same period a year earlier. For the 2015 – 2019 average, cows represented 18.6% of the total slaughter mix. For the years 2021 – 2023, the average percentage of cows in the total slaughter mix was 20.6%  Cattlemen are holding on to this younger, more productive cowherd and more so, than during herd expansion and this is also consistent with retaining far fewer heifers as shown by the heifers in the slaughter mix.  While we know that this is happening, slaughter certainly supports what we contend to be true.

The U.S. beef industry has seen meaningful change over the last 5 years. As a result, the industry will benefit substantially. Positive change can already be noted in the slaughter with the sharp drop in cow slaughter. While 2022’s sharp herd liquidation as the result of drought and poor financial performance was part of the reduction in the age of cows, the herd was becoming more productive due to genetic selection. The two together have resulted in sharply reduced cow slaughter this year and this situation will change little during 2026. I expect the number of cows culled and going to the packing plant during 2026 to be up 4% from my 2025 estimate leaving a figure of 5.46 million head and about equal to 2014. This year’s cow slaughter was about equal to 2015 and the lowest since that year.

While there are still characteristics of the cattle industry that are important drivers to herd growth, key industry economics have changed and consequently, predicting the future of the industry has as well.