The US cattle industry closed 2025 perched on a knife edge between prolonged herd liquidation and the early foundations of a rebuild. New female slaughter ratio data for the full calendar year sharpen that assessment and reinforce the conclusion that the market is no longer deep in liquidation territory, even if it has not yet delivered a definitive rebuild signal. The evidence now points to an industry that has slowed the pace of contraction materially and is positioning itself for a potential turning point in 2026.
Across 2025, the female slaughter ratio averaged 48.8 percent. That figure sits just above the long established threshold that separates herd liquidation from rebuild, a boundary that has historically been centred around 48 percent. While the annual average technically remains on the liquidation side of that line, the margin is narrow and far smaller than in recent years. More importantly, the distribution of monthly outcomes through the year shows a clear moderation in female turnoff intensity rather than a continuation of aggressive destocking.
The year began with female slaughter ratios at elevated levels. January printed at 49.0 percent and February lifted further to 49.6 percent, reflecting the residual effects of drought pressure, tight margins and high cow slaughter carried over from 2024.
March was the high point of the year at 51.7 percent, a level firmly associated with herd liquidation and consistent with the weak herd change outcomes shown in the long run relationship between female slaughter ratios and annual herd movements. However, that spike proved short lived. From April onward, the trajectory shifted lower, signalling a meaningful change in producer behaviour.
By mid-year, the female slaughter ratio had fallen decisively. June recorded 47.5 percent and July dropped further to 46.3 percent, levels that sit comfortably within the historical rebuild zone. August and September remained subdued at 47.7 percent and 47.3 percent respectively.
This mid-year trough is particularly significant when viewed against the charts supplied, which show that sustained periods below the threshold have historically preceded stabilisation or expansion in the national herd. While the US herd continued to contract through 2025, the depth of that contraction aligns with the easing pressure evident in the female slaughter data.
Late year data adds further nuance. From October throughDecember, the female slaughter ratio lifted modestly, reaching 48.6 percent in October, 49.2 percent in November and 49.4 percent in December, before closing the year at 49.9 percent. On the surface, this rebound might suggest renewed liquidation pressure. However, when set against the seasonal pattern illustrated in the monthly female slaughter ratio chart, these increases are consistent with normal late year behaviour rather than a structural return to aggressive cow sell offs. The key difference relative to prior years is that the late year recovery in the ratio occurred from a much lower mid-year base.
The relationship chart comparing female slaughter ratios with annual herd change reinforces this interpretation. The 2025 data points its near the centre of the transition zone, no longer clustered with the severe herd liquidation outcomes associated with ratios above 50 percent. Instead, it lies close to the historical boundary where herd contraction slows and eventually gives way to stabilisation. In previous cycles, similar positioning has been followed not by an immediate rebuild, but by a year of consolidation before expansion begins.
This context is critical for interpreting what 2026 may hold. A rebuild does not require the female slaughter ratio to collapse dramatically. It requires sustained discipline in female retention and an absence of forced liquidation. The 2025 profile suggests that producers increasingly moved into that mindset as the year progressed. Improved pasture conditions in parts of the US, extremely tight overall cattle numbers and strong price incentives to retain breeding stock have all contributed to a gradual shift in decision making. These selection of charts illustrate that the industry is no longer behaving as though it must reduce cow numbers at any cost
It is also important to recognise that herd rebuilds rarely begin with a single clear cut data point. They emerge through marginal changes that accumulate over time. The narrowing gap between the 2025 annual average female slaughter ratio and the rebuild threshold is therefore more important than the fact that the threshold was not crossed decisively. The direction of travel matters more than the precise level at any single moment.
The 2025 female slaughter ratio data confirm that the US cattle industry has exited the most aggressive phase of liquidation and is now operating on the cusp of transition. The charts show a market that has slowed cow turnoff materially, flirted with rebuild territory mid-year and ended the year only marginally above the historical dividing line. If seasonal conditions and price incentives hold, it would take only a modest further reduction in female slaughter for 2026 to mark the formal beginning of a herd rebuild phase.
A transition by the United States into a herd rebuild phase in 2026 would carry important implications for Australia, particularly through global beef supply, trade flows and price formation. The early phase of a US rebuild would almost certainly require reduced cow and heifer slaughter, tightening US beef production at a time when domestic demand remains resilient.
That could initially lift US cattle prices further and limit the availability of US beef for export markets, especially into Asia. For Australia, this creates both opportunity and risk.
On the opportunity side, tighter US supply would improveAustralia’s competitive position in key export markets such as Japan, Korea and increasingly China, supporting export volumes and underpinning prices at a time when Australian production is expected to lift. However, it would also raise competition for feeder and breeding cattle globally and could accelerate capital flows into rebuilding herds elsewhere. More broadly, a US rebuild would reinforce a tightening cycle in global beef supply into 2026, increasing the likelihood that Australian producers operate into a structurally stronger price environment, but also one where herd management decisions taken over the next one to two years will shape profitability well beyond the immediate seasonal outlook.
Matt Dalgleish is a director of Episode3.net and co-host of the Agwatchers podcast.