Cattle herd expansion remains slow as markets adjust to border reopening

USDA's July Cattle Inventory report confirmed that the U.S. cattle herd remains historically tight, with inventory at 94.2 million head. While the report marked the first year-over-year increase (up 2/10ths a percent) in total cattle numbers since 2018, the overall market reaction was largely neutral. A record-low calf crop reinforced that meaningful herd expansion remains limited, suggesting cattle supplies will remain constrained in the near term. Cattle markets are expected to remain volatile as producers weigh expansion opportunities against elevated input costs and market uncertainty.

USDA announced beginning August 24, the Douglas, Arizona, port of entry will reopen as part of a phased approach tied to Mexico's compliance with the Joint Action Plan addressing New World screwworm (NWS). Prior to the 2025 border closures, approximately 100,000 head of cattle crossed the U.S.-Mexico border monthly, making these imports an important source of feeder cattle for southern markets.

While the reopening represents a positive step toward normalizing cattle movements, the process is expected to be gradual. Import volumes may take many months to return to historical levels, and there is no guarantee the border will remain open. (Border access was opened and closed multiple times during 2025 in response to NWS concerns.) Processors in Arizona and other border states have emphasized that restoring cattle flows is critical to maintaining operations and supporting regional beef supply chains.

Cattle futures came under pressure following the border reopening announcement, as traders weighed the prospect of increased Mexican cattle imports against still-tight domestic supply fundamentals. Live and feeder cattle futures moved sharply lower after USDA outlined its phased reopening plan, overshadowing the previous session's gains.

Despite recent weakness in futures markets, local cash cattle prices remain exceptionally strong, reflecting continued demand for feeder cattle and limited supplies. Recent sales highlight the market's resilience, with 590-pound steers selling for $5.16 per pound and 500-pound steers bringing $5.83 per pound at a South-Central Montana NHTC calf sale. Heifers were similarly strong. The Superior Livestock Sale saw 560-pound heifers selling for $4.86 per pound and 490-pound heifers bringing $5.43 per pound. (In contrast, there have been reports of weakening heifer prices in Idaho.) Recent video sales across the West have echoed overall strength, with weaned steer calves commonly sold for $2,700 to $2,800 per head. Bred heifers continue to command $3,900 to $4,100 per head, while quality young bred cows have sold for more than $4,500 per head.

Profitability

Cattle feeders: Slightly profitable - Neutral 12-month outlook
Cow-calf producers: Very profitable - Neutral 12-month outlook

Strong fed cattle prices and heavy carcass weights have helped offset higher feeder cattle costs.

Record-high calf prices, driven by historically tight cattle supplies and strong beef demand, have more than offset elevated production costs.