Not So Fast: Rebuilding the Herd Will Take Time

For the next several years, beef production will decline, and the next cow herd expansion will face more headwinds from elevated US protein production, higher interest rates, increased feed costs, and demographic factors. Meaningful progress in rebuilding the nation’s cow herd will not come until 2025 at the earliest, and the longer timeline will affect each industry segment.

Much like the start of previous cattle cycles, competition for US beef among restaurants, retailers, and export partners will increase; battles for market share among existing processors will intensify; and feedyards will struggle with capacity utilization. That much seems certain.

However, cow-calf producers will be tasked with building a more economically viable herd as outside demands on production agriculture intensify. And a longer transition into the next expansion could invite new opportunities for US beef importers and further burden newer beef processors.

These changes could alter the trajectory of prices and production in the next cattle cycle. The herd expansion will be slower than many are assuming, and the implications from a more sluggish start could be far-reaching.