End of 2025 Update

The U.S. cattle market ended 2025 with historically tight supplies and record-level prices, continuing the strong momentum from 2024. FarmAfield, an investment platform that enables investors to own cattle (plus feed and yardage), views these market dynamics as central to managing risk and supporting long-term herd rebuilding.

Market conditions in 2025

Herd size remains historically low: USDA NASS reported 86.7 million head of cattle and calves as of Jan. 1, 2025, the lowest level in decades and the seventh straight year of contraction. Drought and high input costs have pushed producers to sell females rather than retain them, slowing rebuilding. Because of biological timing, meaningful herd expansion may not show up until around 2028.

Production is declining: Smaller calf crops mean fewer feeder cattle, and forecasts point to lower fed slaughter and reduced U.S. beef production in 2025. Tight lean beef supplies have increased reliance on imports.

Feedlot margins are easing: Feedlot returns were strong in 2024 and early 2025 (with very profitable closeouts reported in late 2025), but margins are expected to shrink and potentially turn negative by mid-2026 as feeder cattle costs rise and other inputs remain elevated.

Demand is strong but volatile: Beef demand has remained resilient, supporting high retail prices, but markets have been volatile—futures pulled back from late-2025 highs, and factors like packing capacity adjustments, trade policy changes, and border disruptions have added uncertainty.

FarmAfield’s approach

FarmAfield emphasizes diversification across regions/feedlots, frequent market updates for investors, and support for sustainable practices and heifer retention to help stabilize long-term supply. The firm notes that while near-term returns have been attractive, increasing costs and volatility require disciplined risk management.

Bottom line

The market’s core tension is that record-high prices are occurring alongside record-low cattle numbers. That creates opportunity, but also greater exposure to cost pressure and market swings—making careful positioning and risk controls essential.