In today’s Beef Buzz, senior farm and ranch broadcaster Ron Hays speaks with OSU livestock market economist Dr. Derrell Peel about what to expect from the upcoming Cattle Inventory Report and what it may signal for the cattle cycle moving forward.
Peel says his expectation is that the industry may finally be reaching the bottom of the herd liquidation phase. “My expectation is that we will probably see a very fractional increase in the beef cow herd coming into 2026,” he explained, adding that would make 2025 “the official cyclical low.” He noted that reduced cow culling last year helped stabilize numbers, saying, “We sort of stopped the liquidation, if you will,” but emphasized that stabilization does not yet mean expansion.
Despite the possibility of a slight uptick, Peel cautioned that growth prospects remain limited due to a lack of replacement heifers. “We don’t have enough replacement heifers to grow in 2026,” he said, noting that even if the report shows a small increase in beef replacement heifers, “I don’t think it’ll be the kind of thing that indicates any significant or really aggressive pace of rebuilding.” As a result, Peel said growth could also be constrained well into 2027.
Peel added that feeder cattle supplies are expected to continue tightening, driven by both a smaller 2025 calf crop and fewer Mexican cattle entering the U.S. market. “Part of that is a reflection of a smaller calf crop in 2025,” he said, “but also the fact that we didn’t get those Mexican cattle in in 2025 that would still be there… showing up in this report.”
Dr. Peel’s expectations line up with general pre-report guesses- Industry estimates for the beef cow inventory suggest the herd will remain near 28 million head. Some analysts project a slight increase of roughly 150,000 to 200,000 head (a fractional year-over-year rise), signaling that 2025 may have been the cyclical low. For Heifer retention, other analysts are watching for signs of herd rebuilding, but recent data from the January 23 “Cattle on Feed” report showed heifers still making up 38.7% of cattle on feed—a high level that suggests producers are not yet aggressively holding back females for breeding. The total herd is expected to remain historically tight, likely mirroring the July 2025 mid-year report which showed the lowest levels since the early 1950s (approx. 94.2 million head).
Turning to beef-on-dairy and dairy numbers, Peel said those cattle continue to play a role but are unlikely to dramatically shift overall supplies. “Feedlots like feeding those cattle,” he noted, but added that the industry may be nearing its limit. “We have probably about maxed out the number of beef-on-dairy calves that that industry can produce.” At the same time, Peel pointed out that dairy cow inventory is currently strong, saying it is “about 200,000 head bigger than it’s been” and near the highest level seen in the past 15 to 20 years. With the inventory report and additional trade data arriving soon, Peel said the industry should gain “a little clearer picture of where we are going forward in 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.
