Texas ranchers optimistic amid slow beef herd rebuild

Forage conditions have improved for Texas cattle ranchers, but rebuilding the statewide herd has been slow, said Texas A&M AgriLife Extension Service experts.

Jason Cleere, Ph.D., AgriLife Extension beef cattle specialist in the Texas A&M Department of Animal Science, Bryan-College Station, said soil moisture, grazing conditions and hay supplies this year improved optimism among cattle producers in many parts of the state. But so far, Texas ranchers have not been holding back heifers or buying replacement heifers and young bred cows at rates that indicate growth.

The size of Texas’ herd ripples into the supply side of national beef cattle markets from sale barns to grocery store meat counters. The state carries around 14.6% of the nation’s beef cattle.

“There is a lot of optimism based on calf prices, the moisture a lot of the state has gotten, and the potential for moisture going into fall,” Cleere said. “But in the grand scheme of things our market outlook experts are saying we haven’t started rebuilding yet.”

Texas ranchers cautious about herd rebuild

Ranchers are dipping their toes into the beef cattle market after two years of statewide drought compared to their dive into herd rebuilding following the historic 2011-2012 drought.

Texas’ beef cattle herd shrunk from 5.14 million head to 3.9 million head between 2010 and 2014. But producers rebuilt the herd quickly as they moved to take advantage of all-time high calf prices in 2014.

In 2011, the weekly weighted average price for 500-600-pound steers at auctions across Texas was $139.73 per hundredweight. By 2014, the weighted average for those steers rose to an average of $236 per hundredweight, with a peak of $283 per hundredweight in October.

Recent prices have eclipsed those records.

Feeder steers at 500-550 pounds were selling for $333.38 per hundredweight in March and have averaged $316.40 per hundredweight since July 2023.

However, David Anderson, Ph.D., AgriLife Extension economist and professor in the Department of Agricultural Economics, Bryan-College Station, said producers are moving more cautiously this time because the net profit opportunities are much lower than a decade ago.

“The dollars and cents of it isn’t the same as last time,” he said. “Costs are higher, interest rates are higher, and that makes producers proceed with more caution, which translates into slower rebuilding.”

Herds aren’t built in a day

There were 4.65 million beef cattle in Texas in 2019, but the number declined to the lowest point since 1961 by February 2023 after back-to-back years of drought and poor forage production.

Anderson said he expects the January 2025 U.S. Department of Agriculture cattle inventory report to show further declines based on the high numbers of heifers going to feedlots and cows going to meat packers.

Rebuilding a cattle herd takes years, Cleere said. Producers need to keep higher numbers of heifers – the young, future calf-producers – in their herds than cows that are aging out of productivity.

For example, a producer with 100 cows with a cull rate of 15% per year will need to hold back at least 15 heifers just to maintain their herd. If that producer was carrying 150 cows before drought forced them to reduce stocking rates, their decisions on holding, selling or even buying replacement heifers determine how quickly their operation reaches its previous capacity.   

Cleere and Anderson agreed that historically high prices are factoring into producers’ decisions to hold heifers that will produce a calf around nine months after reaching maturity.

“Prices have been so good, that a check in the hand for that heifer looks better than the potential future earnings from her producing calves,” Anderson said. “It’s putting producers to a decision on prices they are seeing now or what those prices might be when she has a calf.”

Producers focus on profit potential

The rapid rebuild in 2015 led to price drops that left many producers in a position where they overpaid for replacement heifers in relation to sale prices they realized for her subsequent calves, Cleere said. Tighter margins are leading to more conservative decisions this time.

Despite improved forage outlooks, Cleere said some areas of Texas remain in extreme drought while others are beginning to dry, which also weighs on producers’ decisions about stocking rates.

Cleere said this is a time for producers to focus and optimize their operation’s output – whether it be protecting forage and hay fields from armyworms, deworming and vaccinating to minimize potential losses, or utilizing low-cost inputs like growth implants that can help pack pounds on calves.

“The good news is the market fundamentals are there for what should be a good run of cattle prices,” Cleere said. “With the hay and forage conditions like they are for a lot of producers, I think we’ll see some producers holding back heifers, but even with high prices, they’re facing higher costs and need to focus on every pound their calves can gain and every dime they can make at the sale barn.”

AgriLife Extension district reporters compiled the following summaries:

Central

Hot and windy conditions continued with very little to no rain. Corn harvest was underway, and cotton was progressing well. The dry conditions allowed for hay harvest, but additional rain was needed for cutting to continue and to replenish depleted hay stocks. Corn and rice harvests continued while sorghum harvest was almost complete. Cotton harvest was ongoing, and crops were in good condition. Producers were battling armyworms, but incidents were down due to drier conditions. Range conditions were good, and livestock were in fair to good condition. Cattle, sheep and goat markets were still strong.

Rolling Plains

The district experienced an unseasonable cold front that brought some relief, but conditions were still dry. Irrigated cotton and corn looked favorable, but dryland crops were struggling. Livestock water sources and pasture quality were deteriorating, and producers in many areas were starting to supplement their herds. Grasshoppers remained a problem.

Coastal Bend

Hot and humid conditions continued with little to no rain forecasted. Hay baling continued with good yields reported. Cotton harvest was nearly complete, and producers were optimistic despite lower commodity prices. Corn harvest continued while rice harvest was beginning. Range and pasture conditions were declining with grasses showing signs of drought stress. Pecan trees were shedding nuts. Livestock were doing well and benefiting from recent moisture. Cattle prices remained high, but lower inventories were beginning to slow market prices.

East

The dry conditions and hot temperatures helped producers who were cutting and baling hay. The excessive heat has already taken a toll on plants and vegetables. Urban farmers in Rusk County were using shade cloth to protect peppers and tomatoes from the extreme heat. Fall armyworms and feral hogs continued to be a problem districtwide. Pasture and rangeland conditions were good with adequate soil moisture, and livestock were in fair to good condition.

Southeast

The district reported hot weather conditions with little to no rain in most areas. Most grains were harvested, and producers were getting ready to plant fall crops. Hay production was good with most producers already on their second and third cuts. Most areas completed their corn harvest, and sorghum harvest was nearing completion with very low yields reported by producers. Early cotton did well, but late cotton was suffering. There were isolated reports of fall armyworms, and grasshoppers continued to be a problem. Early planted rice was being cut while some producers were preparing their land to plant wheat. Pecan trees in non-irrigated orchards were not doing well while irrigated pecans looked good. Pasture and rangeland conditions were very poor to excellent and soil moisture ranged from adequate to surplus in most areas. Livestock and stock tanks remained in good condition, and cattle markets were strong.

South Plains

Much cooler weather and spotty showers were reported districtwide, which helped to improve production across all commodities. Most counties needed the rain to improve range and soil moisture levels, and heat unit accumulation was adequate for crop maturity. Livestock were in good condition.

Panhandle

Extreme heat and some scattered showers were reported with a late-week cool front bringing some relief, except for southern counties. Soil moisture varied from very short to adequate while range conditions were very poor to fair. The hot, dry conditions caused pasture grasses to brown and increased the wildfire hazard. Cotton crops were beginning to show signs of stress while irrigated crops were in good condition. Crop conditions were poor to good. Producers started supplementing livestock with hay and protein, but body conditions were good.

North

The hot and dry conditions negatively affected cotton, grass sorghum and some pastures. Hay and corn harvests continued while grain sorghum harvest was nearing completion. Pasture and rangeland conditions varied from very poor to good and soil moisture levels were very short to adequate. Fall armyworms were still a concern and were feeding on pastures and some residential lawns. Livestock conditions were good, but producers may need to supplement cattle.

Far West

Conditions in the district were dry, and high temperatures ranged from the mid-90s to the low 100s. The dry conditions caused the cotton crop to advance quickly, which will likely result in reduced yields. Corn, sorghum and soybean harvests were underway with producers reporting low yields in most fields. Pastures were brown in most areas. Fly numbers were increasing on cattle and livestock. Fall armyworms were reported in a few areas, but no widespread outbreaks to date. Livestock conditions varied from very good to excellent.

West Central

Hot and dry conditions continued with little to no rainfall. Soil moisture was adequate, and hay harvest progressed with good yields. Growing conditions were good with producers already preparing fields for the fall planting season. Pasture conditions were poor to fair with adequate pond and stock tank levels. There were some reports of fall armyworms, but grasshoppers were becoming more of a concern. Livestock remained in good condition, and cattle prices were mixed.

Southwest

Conditions were hot and dry, and most areas received trace amounts of rainfall. Cotton harvest resumed, but quality issues due to wet conditions were reported. Corn and sorghum harvests were complete, and producers reported average to above average yields. Rice harvest progressed with mixed yield outcomes reported, and grain sorghum harvest should conclude in two weeks, weather permitting. Hay baling continued, but quality was lower, and producers were spraying for armyworms. Range and pasture conditions looked good, but some areas were showing heat and drought stress. Livestock were in good condition with strong cattle prices.

South

Very hot and dry conditions were reported in the district with most areas averaging in the low 100s. Corn and sorghum harvests were complete with cotton harvest nearing completion. Spinach was planted. Sesame and citrus crops were in good condition, and hay yields were average. Peanut crops were in good condition with some fields already in the pegging stage. Soil moisture conditions ranged from short to adequate while pasture conditions were poor to fair. Supplemental feeding and access to water was crucial for livestock during the hot conditions, but overall livestock conditions were good. Cattle prices were strong in most areas.