The 2025 U.S. calf crop is projected to be the smallest since 1941. This is contributing to the lowest feeder cattle inventories ever recorded outside feedlots.

Beef production is down nearly 3% year over year, driven by declines in both fed and non-fed beef. Total fed cattle slaughter has decreased by approximately 4.5% so far in 2025. Feedlot placements and inventories have also decreased. August’s on-feed inventory marked the smallest monthly total since 2017.

Despite these declines, there is no clear sign of herd rebuilding. Heifer retention, the key signal for starting the market cycle, is minimal. Beef cow slaughter has dropped. This could potentially lead to a slight inventory increase in 2026. However, significant herd growth is unlikely without greater heifer retention.

For the fourth quarter, fed cattle slaughter and total beef production are expected to continue falling. Limited feeder supplies and the closure of the Mexican border will restrict feedlot placements. Many producers sold calves earlier in the year. This reduced the usual seasonal price pressure. The highest calf prices of 2025 are expected to occur in the final quarter.

Overall, without substantial heifer retention, the anticipated peak in cattle prices is being delayed. This will likely push the market’s peak into the latter part of the decade.

Read more about the continued fall in total beef production here.