In today’s Beef Buzz, senior farm and ranch broadcaster Ron Hays speaks with Oklahoma State University Extension livestock market economist Dr. Derrell Peel, who says tight beef supplies are expected to remain a major driver of cattle prices well into the future. Peel notes that beef production in 2025 is down about 4 percent year over year and could see a similar decline again in 2026. As a result, he says, “there’s no relief in sight from the standpoint of the supply tightness that’s supporting these beef prices,” adding that prices are likely to continue moving higher next year.
Looking ahead to the upcoming USDA Cattle Inventory report, Peel says early indications suggest the beef cow herd may finally be stabilizing. He explains that beef cow slaughter has declined enough to offset the limited availability of replacement heifers. “I think the beef cow herd might be up just slightly for January one,” Peel says, calling 2025 a possible “technical low” for the herd. However, he cautions that even if numbers edge higher, “it’s not going to be able to grow in 2026” due to the lack of heifers in the pipeline.
Replacement heifers remain a key unknown, and Peel expects only modest movement in that category. “I wouldn’t be surprised to see it up,” he says, “but I think it’ll be up relatively modestly, again, reflecting the idea that we’re just sort of dabbling in heifer retention at this point.” While market signals support holding back females, Peel says producers remain cautious about committing to expansion.
That caution, Peel adds, is understandable given lingering drought concerns and financial pressures. “There’s just an awful lot of caution, and I think well-placed caution,” he says. With some regions only barely out of drought and lenders remaining conservative, Peel believes producers are moving forward carefully. “We’re taking this very, very, very carefully as we go forward, and it’s going to be a slow-paced process.”
Reflecting on 2025 overall, Peel characterizes the year as a positive one for cattle producers despite some late-year volatility. “We set new records for most prices through much of the year,” he says, though a fourth-quarter correction hurt some producers who were marketing cattle at the time. Still, Peel points to a strong rebound in December and says, “I don’t think we changed anything in terms of the general direction of this market,” suggesting the industry remains on a similar path heading into 2026.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Ag Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR for today’s show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
