Tight supply pushed up cattle prices to record highs in 2025, and despite recent corrections, the market remains historically strong. Strong prices, abundant feed supplies, and falling feed costs are all boosting optimism in the industry. Yet, the question most often asked is, how long will cattle prices stay elevated and when will rebuilding of the herd occur? In this outlook, we examine where we are in the current cattle cycle, an important indicator of how long high prices might last and share our price projections along with what the sector can expect in 2026 and beyond.
The cattle cycle: herd expansion and contraction and relationship to prices
A full cattle cycle usually lasts 10 to 12 years, moving from expansion to contraction before starting over, though it can be a couple of years longer or shorter. During contraction, tight profitability leads producers to make cautious decisions and slow herd growth as more cows are culled than replaced. In expansion, improving prices and profitability encourage producers to retain heifers and grow their herds. Predicting the timing of peaks and troughs in the cycle is difficult because these phases can vary in length depending on market trends and economic conditions. Factors like beef demand, production costs, feed availability and pasture conditions e.g. drought, play a big role. The past few cattle cycles have been made longer and were heavily influenced by North American drought conditions (e.g. 2013), and black swan events like the BSE disease over the 2003 – 2005 period.
Based upon historical cattle cycles (Figure 1), the cattle market should be nearing the end of contracting, which marks the bottom of the cycle and early stages of the expansion phase. We’ve already seen early signs that the Canadian herd may have stopped contracting, according to July 1, 2025, inventory numbers. However, the U.S. cow inventory is the main driver for overall cattle markets. Because the U.S. did not release July 1, 2024, data, we don’t know if herd rebuilding has started south of the border. Looking at January 1st, 2025, U.S. numbers, the herd still appears to be in the contraction phase.
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