The feeder cattle market over the past year has been nothing short of outstanding. It is allowing producers whose herds made it through the drought fairly intact to retire debt, take care of delayed maintenance and make capital improvements to their operations. This includes things like upgrading working facilities or building cross fencing that will pay dividends in the years to come. Some producers even had the luxury of buying IRAs for income in retirement. This is important, as planning for retirement is something that rarely gets done in our farming and ranching community.
Unless we see changes in the current trend, it appears rebuilding the cow herd will be done at a slower pace than occurs in typical cattle cycles, and it is highly unlikely the cow herd will build back to previous levels. This bodes well for the cow-calf producer, who has a good opportunity to purchase or retain replacements in a higher-priced market and have them pay back before the inevitable cyclic decline in prices. This is unlike a typical cycle where people buy high and sell low.
There are many reasons we are not likely to see the cow herd return to previous numbers, which should mean sustained higher prices over the long run. First, the average age of commercial producers has gotten frighteningly old, and with the value of their land and cattle being at all-time highs, some will choose to retire. We are also losing agricultural land to a mix of purposes, whether that is development or hunting.
Although it is believed it will remain a niche market, the expansion of organic agriculture and other practices, like grass-finished cattle, produces less food per acre than conventional agriculture. It is interesting that fluid milk sales increased this past year by 0.6%—the first increase in fluid milk sales in close to 50 years—and it was driven by whole milk and organic milk sales.
Beef demand and dynamics
One of the most positive things that has happened to our industry is the return of consumer demand for beef. This has largely been driven by the drastically improved quality of our product, which has largely been driven by genetics—primarily from Angus—as well as feeding cattle to extremely fat endpoints. Our industry has literally doubled the backfat endpoint at which cattle are harvested. This is not an energetically efficient way to put on extra carcass weight, and one has to wonder if it will be sustained in years when grain gets expensive.
Growing cattle to the size and compositional endpoint at the current rate has also resulted in an increase in the sudden death of market-ready cattle. This can quickly take a pen of cattle from being profitable to unprofitable in a couple of weeks’ time, particularly when sudden death occurs when fed cattle are walking down the alleyway to be loaded on a truck to go to the plant to be harvested.
The demand for increased carcass weight is also a conundrum for cow-calf producers. The drive for increased size and production potential achieved by maximizing production EPDs has driven many commercial cow herds to have larger, higher maintenance cows than their environment and affordable feed resources can sustain. The end result is declining reproduction and Stayability in their herds. To add insult to injury, most producers are not seeing any change in their payweights when selling calves in the fall.
Today’s U.S. commercial herd is dominated by Angus genetics, and the carcass quality the breed adds into the system has been a big driver in the return of consumer demand. The breed has also had a focus on “supplying the brand,” which for a sustained period of time resulted in an emphasis on their terminal index $Beef. This has culminated in Angus now having the largest mature cow size of any breed as reported by the USDA Agricultural Research Service’s Meat Animal Research Station and its long-term germplasm study.
However, the breed’s average phenotypic weaning weight reported by the American Angus Association in their Sire Summary has only increased six pounds over the last 20 years. This is despite the genetic potential for weaning direct growth EPD increasing by an unrealized 36 lbs. In addition, over this 20-year period, the breed has seen a 50-lb. increase in its average mature weight EPD and a $28 swing in the wrong direction in its $ENergy index. None of this is good news for commercial cow-calf producers, while the feedlots and packers are enjoying the tremendous strides Angus has achieved in growth, carcass weight and marbling.
Balancing the industry’s needs
As an industry, we must achieve more balance between the goals of commercial cow-calf producers, cattle feeders and packers. We also need to reevaluate the underutilization of breed complementarity and heterosis in our cattle breeding systems. The idea that more is better in the use of EPDs also needs to be challenged in our thinking. The beef industry has always had a market for extremes, while optimums are the path to profitability.
Every operation is a matrix of environment, feed resources, management and market, and this matrix will be different for operations that are only divided by a fence line, let alone the profound differences found in drastically different regions of the country. Therefore, one size does not fit all, and the genetic potential and possible crossbreeding systems need to be custom fit to each producer’s operation.
The industry also needs a more consistent message and assurances on trade from our industry and government leadership. Too often, our market is predicated on emotion instead of facts, which can have a drastic impact on a producer’s bottom line. When the administration floated in the fall of 2025 that it was looking at increasing imports from Argentina, both the board and the cash market had an immediate and significant negative reaction.
However, USDA’s running yearly average imported beef through September 2025—which was the most current data available when this article was written—had beef imports from Argentina at 11,445 tons. Compare that to Australia and New Zealand, which were at 274,842 and 142,271 tons of imported beef into the U.S., respectively. Argentina is a very large beef producer, but they also lead the world in per capita consumption of beef, which means they have never been a major player in the export market.
Therefore, the U.S. could double or triple the imports from Argentina without having a major impact on our market, but if we doubled our imports from Australia, it would have a profound impact on our market based on fundamentals and not emotion. Therefore, our industry and government need to be more disciplined in their rhetoric and policies such as tariffs and how it relates to our labor supply.
Ultimately, a profitable U.S. beef industry needs vibrant and fair reciprocal trade policies. To have a proper balance in the beef mix we sell to consumers, the U.S. needs a steady imported supply of wholesome lean beef to mix with our high tallow trim in order to supply our domestic grind market. By the same token, we rely on exporting both our high-end middle meats, as well as variety meats—such as liver, hearts, tongues, etc.—in addition to hides and other byproducts in order to remain profitable.
Certainly, from a cow-calf perspective, our industry is seeing unprecedented value for our product, and it appears like this profitability can be sustained for a significantly longer period of time than past cycles would predict. However, our own worst enemy is ourselves. We must do business based on fact and not emotion. We also must rebuild the cow herd in a way that is better able to withstand an inevitable drought, with genetics custom fit to the circumstances they will be asked to perform in. Ultimately, we need a factory—which is our cow herd—that balances the interests of the different segments of our industry and ultimately provides consumers with a wholesome, high-quality product that they can afford and savoir.
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