The nation’s cowherd size varies due to drought in various regions of the country, and other factors. But its size heading into 2024 is too low. According to Oklahoma State University economist Derrell Peel, the Jan. 1 beef cow herd of 28.9 million head is the smallest since 1962. Peel said he expects the numbers to be even lower at the beginning of the new year.

Demand for beef in the U.S. and internationally is increasing. According to data collected by the Beef Checkoff, demand domestically is high for beef prepared at home and offered in food service, especially for ground beef.

Rebuilding the nation’s cowherd isn’t a fast process, especially compared to the amount of time required to increase the supply of chickens or hogs, for example. Cattle producers will have to retain more replacement females and sell fewer cows. In turn, though, this move will reduce the numbers of cattle slaughtered for beef. Beef production in 2022 was estimated at 28.29 billion pounds, an increase year-over-year from 27.95 billion pounds. The USDA’s current estimate for 2023 production is 26.97 billion pounds and the current estimate for 2024 is just 25.27 billion pounds.

Peel anticipates after record beef production in 2022, due to drought liquidation, beef production fell in 2023 and is expected to fall sharply for at least two more years. By 2025, beef production is forecast to be down 15% to 16% from the 2022 level. Peel said this will be the lowest level since 2015 and possibly the lowest level since 1993.

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If you have filled a seat at a local livestock market and watched weigh cattle bring incredible prices, the monthly slaughter data of total female slaughter coming in at the highest average rate since 1986 will come as no surprise. Peel said, examining the last cyclical herd expansion, he expects another year of reduced female slaughter before the cow herd inventory will stabilize and begin expansion.

Peel said some producers are still unable to retain heifers due to ongoing dry conditions and the need to grapple with the record-high input costs that have plagued the industry of late. Peel said the bright spot is the expectation of strong prices supporting the recovery of the cattle inventory.

According to an article by Peel that appeared in an industry publication, Feedlot, consumers will be feeling the squeeze of the smaller cowherd at the grocery store, which certainly comes as no surprise.

Peel said total beef production in the U.S. is down 5.2% year-over-year through the first three quarters of the year. Non-fed beef production includes beef from cows and bulls and makes up an average of 16% to 17% percent of total beef production over time. Non-fed beef production has averaged 16.5% of total beef production thus far in 2023 and is down 6.1% for the year to date. For consumers, especially as producers begin to stabilize cowherd numbers, this means less ground beef and, in turn, higher prices.

According to the USDA, the September ground beef price of $278.25/cwt (hundredweight) is a record price, slightly above the one-month pandemic spike in May 2020 that reached $277.76/cwt. You’ll recall the pandemic spike was caused by slowed processing lines, plant closures and more cattle left on feed longer in the feedyards. If I never hear the terms “processing glut” and “black swan event” again, it’ll be too soon.

The most likely scenario, according to Peel, is increased importation of beef for ground beef, and those imports are already up just more than 5% year-over-year. Beef consumers will likely be willing to pay a bit more for beef until producers are able to stabilize and rebuild the cowherd and stabilize supply of American beef.

Rachel Gabel writes about agriculture and rural issues. She is assistant editor of The Fence Post Magazine, the region’s preeminent agriculture publication. Gabel is a daughter of the state’s oil and gas industry and a member of one of the state’s 12,000 cattle-raising families, and she has authored children’s books used in hundreds of classrooms to teach students about agriculture.