Smaller cattle herd means market volatility

It’s well-known that the U.S. cattle herd continues to shrink. The January U.S. Cattle Inventory report showed the total inventory at 86.2 million head on January 1. That was down 300,000 head from last year. American Farm Bureau analysis showed the combination of fewer beef cows and a declining calf crop means the 2026 calf crop will likely continue to trend downward because there are fewer calves available for the breeding herd, even if more heifers are kept for breeding purposes. Tighter cattle supplies will contribute to higher prices and volatility for cattle and beef in 2026. Smaller cattle supplies paired with strong consumer demand for beef have driven up prices for both cattle and beef. With cattle supplies this tight, markets have become more responsive to news and events that could impact supply and demand. Beef cattle cash receipts have been one of the few bright spots in the U.S. agricultural economy.