The latest cattle inventory report revealed the smallest U.S. cow herd since reports first began in 1972. At just 28.2 million head, the smallest herd on record is 2% smaller than last year. USDA data suggests high input costs, drought conditions and other variables have all contributed to ongoing herd liquidation.

An interesting aspect of this cattle market is that downward-trending feed prices and highly profitable live and feeder cattle prices have not spurred increases in inventory. Why? Analysts agree that uncertain access to hay supplies amidst ongoing dry weather has tempered producers’ plans to rebuild herds. Additionally, rising interest rates over the last year have diminished confidence in market conditions. Read more on cattle inventory and other USDA data here.