LUBBOCK, TX – Drought is complicating cattle herd rebuilding even as feeder and slaughter cattle prices remain historically strong. Nearly half of the U.S. cattle inventory is now in at least moderate drought, increasing pressure on forage supplies and retention decisions.
USDA’s Economic Research Service says about 46 percent of cattle were in drought areas on July 7, compared with 16 percent a year earlier. Beef cow slaughter remains low, but weaker pasture conditions could force more culling in major producing regions.
The agency lowered 2026 beef production to 25.288 billion pounds and reduced the 2027 forecast to 25.200 billion. Fewer placements and slower fed-cattle slaughter are expected to limit supplies into next year.
Feeder steers averaged $376.05 per hundredweight in June, while slaughter steers averaged $258.23. Strong prices support producer returns, but drought can raise feed costs and delay herd expansion.
USDA’s July 24 cattle reports will provide clearer signals on heifer retention and rebuilding intentions. Producers will watch whether pasture losses outweigh incentives created by record cattle values.
Farm-Level Takeaway: High cattle prices support rebuilding, but drought may force producers to delay retention and reduce herds.