Is the beef herd rebuilding? This is one of the main topics in the auction barns and across cattle country.
The next question many are asking is if cow liquidation has slowed down or stopped. Processed cattle are now at historic lows, while the second phase of rebuilding – heifer retention – is not moving much at all.
As I have said before, there are different ways to look at these issues. The first is if you are in a drought area and the other is if you have been lucky enough to get rain and grow a little grass.
Some areas of Arizona, southern Colorado and New Mexico have seen rain and excess flooding, but now they also have green grass, which always makes ranching easier as there are more management alternatives to work with.
While there are some heifers being sold, it is most likely by producers looking to upgrade their herds.
There are still a lot of heifers in feedlots or headed to winter wheat pastures, and in the last three or so years, producers have been keeping pregnant cows to get extra calves. This makes cow herds older, which will have to be sold and replaced at some point.
Derrell Peel, Oklahoma State University Extension livestock marketing specialist, said in his latest newsletter, “Cyclical herd growth requires two distinct biological phases. Two components are necessary for cyclical herd rebuilding – decreased beef cow culling and increased heifer retention.”
Peel said, “The sharp drop in monthly heifers processed in the last couple of months may be a stronger indication of heifer retention.”
Packinghouse figures show, through the first three quarters of 2026, heifers processed fell more than 11 percent year-over-year, down more than twice as much as steers processed, and heifers averaged 37.8 percent of total fed slaughter, down from a cyclical peak of 40.1 percent in late-2023. The month of July showed a 100,000 head year-over-year increase in beef replacement heifers.
The U.S. dairy herd is doing its part to supply cattle for slaughter as it is the largest size in 34 years, with cow numbers now above 9.7 million head.
Kathleen Wolfley, vice president of insights at EA Risk, said, “I’m not going to rule out 10 million milk cows as a possibility, I think it is on the table. I think there is a point where we plateau rather than just continuing at this rate for another couple of years.”
Wolfley also said, “The U.S. dairy herd has not topped 10 million cows in nearly four decades, the annual average last exceeded this mark in 1989, reaching 10.04 million head. The combination of strong dairy-on-beef cross calf prices and favorable milk margins have encouraged dairy producers to hold on to more animals.”
Large processing investments in Texas, Kansas and South Dakota have helped support dairy expansion in those regions.
Also, when day-old dairy-on-beef calves approached $2,000 a head, the economics of milk pencil out a lot easier. Nearly one in four feedlot cattle are dairy-on-beef crosses. It sounds like the dairy industry has a strong future.
Dennis Sun is the publisher of the Wyoming Livestock Roundup, a weekly agriculture newspaper available online and in print.
