Moving into the fourth quarter of 2024, there are no indications that the U.S. cattle industry is ready to rebuild. In fact, cattle numbers are continuing to shrink this year.

The supply of beef replacement heifers coming into 2024 was the lowest since 1950 and indicates that the beef cow herd continued to liquidate this year, despite a sharp drop in beef cow slaughter.

New data on cow herd and replacement heifer inventories will not be available until early 2025, but feedlot and cattle slaughter figures throughout the year show what is happening to cattle inventories.

The biggest question in the cattle industry: Has any heifer retention begun that would lead to herd rebuilding.

Trend in heifer retention

The October Cattle on Feed report provided a quarterly update on the numbers of steers and heifers in feedlots. The heifer inventory on Oct. 1 was 39.7% of total feedlot inventories.

The graph below shows the heifer percentage of feedlot inventories for the past 28 years. It is clear that the heifers on feed percentage continues to be near the upper range of this statistic.

It also shows that the percentage of heifers on feed necessarily decreases with increased heifer retention during cyclical herd expansions, as happened during the minor herd expansion in 2004-05 and during the 2014-19 herd expansion.

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The percentage of heifers on feed has been above the average percentage level (red dotted line) since late 2018, and has averaged above 39% since 2021.

On the feedlot front

As of Oct. 1, the inventory of cattle in feedlots was equal to the previous year. In fact, the monthly feedlot inventory has averaged 100.7% of year-earlier levels for the past 13 months. Feedlots have thus far been able to maintain feedlot inventories despite declining feeder cattle supplies.

The total calf crop has been declining since 2018, down 7.5% through 2023 and projected to be down another 1.5% in 2024. Steady feedlot inventories for over a year have masked this decline in feeder cattle supplies by slowing feedlot turnover rates. Continued heifer feeding combined with increased days on feed have helped feedlots to hold inventories at higher levels than overall cattle numbers would suggest.  

Drought conditions this fall resulted in an earlier-than-usual fall feeder run in some regions. This is allowing feedlots to place more cattle sooner and continue holding inventories for a bit longer. However, more placements now mean less placements later.

Additionally, at some point heifer retention will increase and result in a sharper decrease in feedlot placements. Feedlot inventories are expected to decrease moving through 2025.

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Resilience of beef

Beef production is larger than expected in 2024. Early-year forecasts of a 4% to 5% decrease year over year in beef production have been trimmed through the year.

At this point, total annual beef production is expected to be unchanged from last year. Fed beef production from steers and heifers is up nearly 2% year over year due to larger-than-expected fed slaughter and sharply higher carcass weights in 2024.

Non-fed beef, from cows and bulls, is down about 13% year over year through mid-October. This is the result of a 13.6% decrease in dairy cow slaughter and a 17.1% year-over-year decrease in beef cow slaughter in the first 41 weeks of the year.

Future of cattle supplies

Despite larger-than-expected feedlot inventories and larger-than-expected beef production thus far in 2024, prices are higher year over year for calves, feeder cattle and fed cattle, as well as wholesale and retail beef prices.

The industry continues to evolve with ever-tightening cattle supplies. With no indication of heifer retention thus far in 2024, there are few prospects to do more than perhaps stabilize the beef cow herd in 2025, with significant chances of additional liquidation for another year.  

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