By Scout Nelson
The U.S. cattle market continues to show signs of tight supplies as producers consider whether to expand their beef herds. The mid-year cattle inventory is higher than it was on July 1, 2025, but the number of beef cows is lower.
Matthew Diersen, Griffith Endowed Professor and SDSU Extension Risk and Business Management Specialist, examined the relationship between cattle supplies, cow prices, replacement heifer values, and future market conditions.
Cull Cow Prices Remain Strong
Cull cow prices remain an important part of the cattle market. During the first half of 2026, national cutter cow prices stay above year-earlier levels.
Cull cow prices often follow a seasonal pattern. Prices usually reach higher levels during the summer and lower levels during the winter. However, tracking local prices has become more difficult since the Agricultural Marketing Service stopped reporting local cow prices in late 2024.
South Dakota State University students continue collecting prices from Sioux Falls Regional Livestock to provide a local view of the market. The monthly average price for black-hided cows weighing between 1,500 and 2,000 pounds has followed the national trend. The average reached $189.07 per hundredweight in May 2026.
Cull Cow Values Provide Market Signals
The value of cull cows compared with other slaughter cattle can provide information about demand for lean beef. In July 2026, the Sioux Falls Regional Livestock cull cow price was 0.71 of the price for Choice 2-3 steers.
For the first half of 2026, the average ratio was 0.73. This was higher than the 0.60 average recorded from 2021 through 2025.
This ratio can provide some information about possible cull cow values compared with live cattle futures. However, the ratio changes over time, which can make it harder to protect cull cow prices through futures contracts.
Risk management tools, including out-of-the-money put options, could still help producers manage price risk. Because the relationship between local prices and futures prices can change, producers may also need to consider basis risk when planning a hedge.
Replacement Heifers Support Herd Expansion
Replacement heifers represent another important part of the cattle market. South Dakota has several large livestock auction locations that report feeder cattle prices through the Agricultural Marketing Service.
Sales records from reported locations were reviewed from July 2025 through June 2026. During this period, heifers represented about 40% of total sales receipts. This shows that producers were keeping some heifers for use in their own herds.
The percentage of heifers sold remained fairly steady from month to month. It was also similar to the national share of heifers in feedlots.
Replacement Heifer Sales Show Seasonal Changes
Replacement heifers represented 11% of all heifers sold during the period reviewed. The share changed during the year, showing some seasonal movement in replacement heifer sales.
Few replacement heifers were reported from July through September 2025. The share increased to 20% in February 2026 and remained at 17% in March 2026.
Price comparisons need to be made carefully because replacement heifers can be priced in different ways. Some prices are reported per hundredweight, while others are reported per head.
Replacement heifers often sell for more than other heifers because of their future value to the herd. In some cases, their value can come close to the value of steers with similar weights.
Cattle Cycle Affects Future Values
Cows and replacement heifers can be viewed as animals that produce future calves. Because of this, the cattle cycle and expected calf profits play an important role in their value.
When the cattle cycle reaches a peak, future calf profits are expected to be lower than current profits. This can affect the amount producers are willing to pay for cows and replacement heifers.
Interest rates also affect cattle values. Higher interest rates increase the discount rate used when considering future returns. As a result, cow values can be lower when interest rates are higher.
Market reports from several locations also provide more details about replacement cattle. Locations such as Joplin, Missouri; Dodge City, Kansas; and Oklahoma City, Oklahoma, report information about bred heifers and bred cows.
These reports include details such as animal weight and age. The Livestock Marketing Information Center compiles these reports and makes the information available to producers and other cattle market users.
Photo Credit: istock-simplycreativephotography
Categories: South Dakota, Livestock, Beef Cattle, Dairy Cattle