Livestock Monitor – 2/13/2026
CATTLE AND SHEEP INVENTORY LEVELS FALL
The U.S. cattle herd continued to decline for the seventh consecutive year. USDA-NASS reported on January 1, 2026, that all cattle and calves were at 86.155 million head, down nearly 317,000 head (-0.4%) from the prior year and the lowest herd size since 1951 (82.1 million head). Most of the decline in inventory levels occurred in Kansas and Missouri, which were reported down 100,000 head each. New Mexico fell 90,000 head, Arizona and Wyoming decreased by 60,000 head, and Iowa was down 50,000 head. Most other states reported declines that were around 10,000 to 20,000 head. Washington, California, Colorado, Texas, Arkansas, and Wisconsin each remained unchanged from a year ago. Inventory levels rose in Nebraska by 100,000 head, and North Dakota, South Dakota, and Oklahoma each increased by 50,000 head. Gains of 10,000 and 20,000 head were reported in Idaho and Utah, respectively. Drought continues to be in focus for the cattle sector through this year, especially for those producers in the western U.S.
USDA-NASS recently released the sheep inventory report, and as of January 1, 2026, all sheep and lambs were reported at 4.99 million head, the lowest on record. Compared to a year ago, sheep and lamb inventories fell less than one percent (-0.7%) to 35,000 head. Much of the decline in inventory levels occurred in western states such as CA (-1.0%), ID (-6.4%), OR (-1.4%), UT (-1.8%), MT (-1.6%), and WY (-5.1%), which correlates with areas that have been grappling with drought for several months. However, other states grappling with drought that reported increases were CO (+1.2%), KS (+2.5%), SD (+2.4%), and TX (+4.5%).
A notable decline was reported in the breeding flock, which fell 50,000 head (-1.4%) to just over 3.6 million head, the lowest on record. Market lambs posted an increase of +1.1% to just under 1.4 million head, the highest in three years. The lamb crop declined marginally (-0.3%) from last year by 10,000 head to 3.03 million head, which is on par with the prior two reported lamb crops. Overall, the report signals continued tight domestic lamb supplies.
OUTLOOK FOR FEED COSTS HOLDS STEADY AS WEAK DOLLAR SUPPORTS EXPORTS
The USDA’s Office of the Chief Economist released its monthly commodity market projections this week. A highlight was boosting projected corn exports for the current crop year to an unprecedented high of 3.3 billion bushels, +30% higher than the record set last year. Combined with strong corn refining usage for ethanol, price prospects for this year’s corn crop are now expected to hold steady at slightly above $4.00 per bushel. So far this crop year, that began last September, corn prices at the farm have averaged slightly below $4.00 per bushel, but the December average was $4.10 per bushel. Steady to slightly higher prices between now and the end of the crop year in August would result in satisfying the current price forecast.
The increase in corn exports expected for this year is supported by shipments so far this crop year that are up +50% from a year ago. Destinations that have hiked purchases notably are Western Europe, Japan, South Korea, and Taiwan. Mexico and Canada have taken about +1% more corn. Even with more corn headed overseas and being refined, the amount of corn that the USDA sees moving into livestock and poultry feeding channels as well as the mysterious residual category of usage is slated to be up +15% to +20%. Ending inventories of corn at the end of this coming August are projected to be 2.127 billion bushels. The last time corn inventories were this large was in August 2019. Corn prices at the farm in August 2019 averaged $3.93 per bushel.
The protein supplement side of the feed market is dominated by soybean meal, and the monthly market projections were unchanged from recent months for this commodity. Soybean meal prices are expected to average slightly less than $300 per ton this crop year, about the same as the 2024/25 crop year. So far this crop year, soybean meal prices have averaged about $310 per ton with weekly averages for January near $300. A record soybean harvest in South America in the next few months is expected to be an even match with good buying demand for soybean products from China.
FOODSERVICE RETAIL SALES CONTINUE TO OUTPERFORM REST OF ECONOMY
Retail sales at food service and drinking places in December were up +4.5% from a year earlier, exceeding the pace of retail trade in general that was up +3.8%. Grocery store sales were up +2.2%. All three of these comparisons reflected improvements from November’s year-over-year gains, which was a bit of a surprise but may reflect the impact of the federal government reopening after some precautionary pullbacks in spending during November.
Food service and drinking place sales in the last quarter of the year registered a +4.7% gain, down from the +6.5% and +6.4% gains, respectively, in the spring and summer quarters but better than the winter quarter advance of +2.9%. The modest growth in grocery stores sales of +2.2% is noteworthy given that it follows the spring and summer quarter sales growth of +3.4% and +2.9%, respectively. The decelerating sales trend over the last three quarters of 2025 is a possible cautionary note for meat demand going into 2026.
The annual comparisons for food sector retail sales reinforce the long-term trend favoring food service over grocery stores. In 2025, food service and drinking place sales were up +5.2% from year earlier, bouncing back from only a +2.9% gain in 2024. The prior three years registered double-digit percentage gains. Grocery store sales were up +2.4% in 2025.
Livestock Monitor (pdf)