“How many of you have waited a lifetime to see these cattle prices?” That was the question asked by Randy Blach, CEO of CattleFax, as he delivered an upbeat market outlook during the recent Texas A&M Beef Cattle Short Course.

Blach set the stage by explaining why the industry is experiencing record highs, citing three main factors:

• Tight supply due to the downsizing of the nation’s cow herd.
• Strong demand that continues to drive higher prices.
• Consistent high quality, with 85% of all steers and heifers harvested grading Choice or Prime, ensuring a reliable, high-quality eating experience for consumers.

“About this time in 2020, five-weight calves were worth $1.53 a pound, as we were in the middle of COVID. Today, that calf is worth $4.32 a pound,” Blach noted. “I predict the market will remain at profitable levels for the next two to three years. Prices won’t stay at today’s highs, but they will still be profitable.”

Blach said there are mixed signals as to whether the rebuilding of the cow herd has begun. Improved moisture in many areas and fewer heifers on feed as of the July 1, 2025, report suggest some retention is occurring.

“I think there will be some traction going forward,” he said. “Cow slaughter rates are decreasing and along with heifer retention, these are two key drivers toward herd rebuilding. The rebuild will be slow in 2026, but I believe in 2027–2028 we’ll see a healthy pace.”

CattleFax projects replacement heifer numbers will drop by 46,000 head in 2025 but rebound with gains of 300,000 head in both 2026 and 2027.

One short-term driver is the current shutdown of Mexican cattle imports at the border, resulting in 100,000–125,000 fewer head entering U.S. feedlots each month. “We have more hooks than fed cattle right now,” Blach explained.

Another factor is the growing Beef x Dairy sector, which is expected to account for 15–20% of total slaughter in the years ahead.

Blach emphasized that the industry has met demand despite record-low cattle numbers by increasing carcass tonnage. “We’re doing more with fewer head, while delivering higher quality and more consistent cuts to the plate,” he said.

According to CattleFax data, carcass weights have been increasing steadily and last year went up about 26 pounds. That represents an equivalent of about a million head of cattle being harvested to help the offset.”

Cow-calf producers, he noted, are focused not only on increasing weights but also on delivering predictable eating quality. 

Blach noted a major transformation in the beef industry since the 1980s and 1990s, when only about half of cattle graded Choice or Prime. “Today, the upper two-thirds of our cattle grade Choice or Prime,” he said. “That’s why we’re seeing such strong demand growth. In 2025, we’ll produce nearly as many Prime carcasses as Select, a remarkable shift from just a few decades ago when only 2% graded Prime. He added that in the past, as many as half of consumer eating experiences were disappointing, a problem the industry has dramatically improved.

Ground beef makes up 53% of total beef consumption, and the current market is already short on this product, a shortage that will intensify with the Mexican border closure.

“Ground beef is a powerful part of America’s eating experience. It can be the center of the plate or an ingredient,” Blach said. With tight supplies, record ground beef prices are expected ahead.

Consumers have proven willing to pay for beef at record levels, and current demand for all proteins remains strong. Per capita net beef consumption is now the highest since 2009.

Blach closed by noting that demand for U.S. beef is at a 40-year high. “Demand growth drives prices,” he said and closed by urging producers to continue improving their product, pay down debt from tougher years, and position themselves for the opportunities ahead.