Cattle in U.S. feedyards drop to eight-year low
The January U.S. Department of Agriculture Cattle on Feed Report reveals a sharp decline in feedlot inventories, kicking off the year with 11.45 million head – down 3.2 percent year-over-year and the lowest levels since 2018.
With feeder cattle supplies tightening and placements dropping for nine straight months, feedlots are bracing for higher costs and shrinking margins.
This report marks the 14th consecutive month of declining feedlot inventories.
December 2025 feedlot placements were down 5.4 percent from one year ago and were the ninth consecutive month of lower placements.
Total placements for the past six months account for 92 percent of the current feedlot inventory and were down 8.2 percent year-over-year.
Feedlot marketings in December were higher than last year, up 1.8 percent year-over-year. Slightly higher December marketings follow an 11.9 percent drop in November marketings, and it was the first increase in monthly marketings in eight months.
Total marketings for the past six months were down 6.9 percent year-over-year. This sharp decrease in average feedlot placements and marketings reflects a declining rate of feedlot throughput.
Feedlot throughput has declined, reflecting the fact total calf crops have declined each year since the cyclical peak in 2018.
Mexico imports affect feedlots
Despite tightening feeder cattle supplies, feedlots were able to hold feedlot inventories mostly steady from September 2023 through June 2025, with decreased feedlot turnover rates.
This, along with decreasing feedlot cost of gain, has kept feedlots mostly profitable up to this point.
However, fewer feeder cattle inevitably catches up with feedlots, and inventories have declined more sharply since last June and will continue to decline in coming months.
The lack of Mexican cattle imports contributes to an already limited feeder supply, especially in Southern feedlot regions. Feedlot margins are expected to tighten significantly in coming months as higher feeder cattle prices and limited feeder availability squeezes feedlot volumes and margins.
Regional cattle feeding differences have become more pronounced recently.
Drilling down on the numbers
In Nebraska, there were 2.62 million head as of Jan. 1, up 1.6 percent from one year ago, while Texas reported 2.53 million head, down nine percent year-over-year. The lack of Mexican cattle is exacerbating generally tight feeder supplies in the state of Texas.
Kansas is third with 2.4 million head, unchanged from last year, and Colorado rounds out the top four feedlot states with 1.05 million head, down 15.2 percent year-over-year.
These top four feedlot states represent 73.6 percent of monthly feedlot inventories. The next four feedlot states – Iowa, California, Idaho and Oklahoma – add another 16.2 percent share to cattle feeding, making the top eight states account for 89.8 percent of monthly feedlot totals.
With feedlot margins tightening and turnover rates slowing, the industry is facing some big changes. The months ahead are going to be a real test of resilience as feedlots work through rising costs, regional challenges and the continued impact of shrinking calf crops.
Derrell Peel is the livestock marketing specialist for Oklahoma State University Extension. This article was originally published by the Missouri Ruralist on Feb. 2.
