These days, one of the most frequently asked questions in the cattle sector is, “When will the beef cow herd rebuild?” The answer is largely based on forage conditions and calf prices. Given those two market factors, it may be well into 2026 or 2027 before we begin to see heifer retention rates and the beef cow population tick back up.
The dairy and beef industries are further overlapping each other in current market conditions with high-value calves, softened feed costs, and scarce heifer supplies . . . both for beef and dairy heifers. Prices for weaned beef calves are at record highs, reaching around $300 per hundredweight (cwt.) in many Central Plains states in mid-July. Alfalfa and other hay prices have come back down to near $150 to $200 per ton, following the 2022 and 2023 record highs. And replacement heifers are hard to find as detailed in a new report by CoBank, “Beef calf prices and forage are stalling the herd rebuild.”
Dairy cows support the beef industry, too
Total cattle slaughter was down 769,700 head year-to-date in mid-July 2024. Of that number, cows represented over 540,000 head. Overall, dairy cows accounted for 250,600 head and beef cows comprised 294,200 head of the reduction in total slaughter so far this year. Dairy and beef producers alike are not culling as many of the lower tier production animals as replacements are hard to come by, and even if you find them, they will cost you a pretty penny to obtain.
Dairy and beef cull cows typically become ground beef and contribute to the 90% lean trimmings beef supply. Those lean trim prices are also on the record high list in 2024 because of short supply and imports from other countries are flowing into the U.S. to fill the gap. If we continue to have fewer cattle going to market, the prices will remain elevated.
Meat packers are squeezed
According to the Sterling Beef Profit Tracker, beef packers were losing close to $100 per head in July 2024. Limited cattle entering processing plants has caused a spiral that’s leading to continued high beef and cattle prices and tighter margins for beef packers. Eventually, this spiral will come to an end because even if cattle prices continue to reach the sky, there is a finite number of animals available to be sold for processing.
Once beef cow retention begins, cull cow and calf prices will continue climbing for dairy producers. This is especially true considering that once the herd does start its rebuilding process, it’s unlikely that there will be a drastic change in beef cow numbers as the growth could look more like a slight bump in cow inventory.
In the meantime, that means dairy-beef calves will continue to fetch substantial premiums in the marketplace. For dairy producers, that’s adding revenue to the bottom line.
