The US cattle herd contraction has been well documented, and the resulting prices for producers are welcome, but there are issues farther down the chain. Oklahoma State University Ag Economics Professor Dr. Darrell Peel told a webinar audience last week the beef industry in the US is cyclical and has been for 150 years. But in 2025…

“We’ve had exaggeration of those normal seasonal tendencies because of drought issues in the beef industry and so we find ourselves today with these very low numbers. The last low we had was about a decade ago in 2014 and we’re actually, 1.1 million head of beef cows smaller even than we were then.”

With the total cattle herd in the US being at the lowest point since 1951, Peel says producers are the beneficiaries of basic economics.

“If you’re following it at all, you know that we’ve got record high cattle prices across the board for all kinds of cattle. We’ve got record high beef prices at the wholesale and retail levels. And so there’s lots of supply-driven fundamentals here that are really driving the market. We’ve had incredible beef demand to match that, which is why we can maintain these record high prices at the consumer level. But there’s also lots of challenges along the way.”

Those challenges, Peel says, start to show up at the processor level.

“Everybody is really caught in this, in this challenging, sort of adverse, buy-sell margin because of the supply driven price increases from the bottom up in terms of animal production. And so that’s the environment that everybody’s in right now. And you know, again, without getting into too much of the detail, the bottom line is it’s going to be a while…this is not going to be a fast process.”

With herd expansion yet to really begin, Peel predicts we’ll stay in this high-price environment for the rest of the decade.