Like many things in this world, the business of cattle ranching runs in cycles, droughts, feed costs, consumer demand, trade policy, animal health, and the long timeline between calf-to-harvest all go up and they all go down. In 2025, many of those cycles are more tightly wound than usual. Here’s a look at where things stand, what to expect, and what ranchers in Western Colorado should be watching (and perhaps doing).
Macro Trends: What’s Driving Beef & Cattle Prices Up
- Tightening Supplies & Smaller Herds
The U.S. cattle inventory is down. According to USDA / ERS, cattle inventories are among the lowest in decades.
Beef numbers have dropped, and calf crops are smaller. The result is fewer animals flowing into feed yards and ultimately into slaughter. Learn More
- Strong Demand Holding Steady
Even with inflation, beef demand remains resilient. Consumers are still paying for quality beef; beef remains preferred protein in many markets despite price pressures. - Higher Beef Prices Across the Chain
As supply tightens and demand remains steady or even grows, prices are being pushed upward. Feeder and live cattle prices have risen (often significantly year-over-year), and boxed beef (e.g. Choice cuts) are setting new highs. - Reduced Imports & Trade Pressure
Import forecasts (especially lean beef or “non-fed” supplies) for 2025-2026 have been trimmed, in part due to tariffs, in part due to logistical or health constraints. - Carcass Weights & Feeding Costs
Carcass weights are elevated, which helps some of the shortfall in head count. However, feed costs, drought, and grazing conditions remain risk factors. Where feed is expensive, or where grazing lands are stressed (like in some parts of Colorado), the margin between cost of gain and value of gain becomes tight. - Outlook & the Cattle Cycle
Because herd expansion or contraction occurs over long time horizons, think many seasons or even many years, and because some producers have held off expanding until conditions are more favorable, we’re still likely in a period of contraction or at a low point. Many analysts expect 2026 to begin to show signs of herd rebuilding, depending on feed prices, drought, and profit margins. Learn More
Regional & Local Considerations: Western Colorado
While national trends set the backdrop and overall tone of the industry, ranchers in Western Colorado face some additional and sometimes amplified challenges and opportunities:
- Drought and Water Availability
The West continues to see some variability in precipitation and snowpack. In places like Western Colorado grazing lands can be limited or may need a resting period, consequently cattle ranchers are more reliant on supplemental feeding or transporting cattle to seasonal locations, which can increase costs. - Transportation & Market Access
Longer distance to markets, auctions, and processing facilities adds transportation costs. When prices are rising, these additional costs cut into net returns even as gross receipts look favorable. Also, local auction markets may see variable supply, which can create volatility in local cattle prices. Leading to more unpredictable pricing. - Land & Grazing Costs
Land rental, property tax, fencing, infrastructure, and grazing permit costs can vary sharply. Where grazing permits or leases are tight, ranchers may have less flexibility to expand or retain heifers, even if it’s otherwise profitable to do so. - Labor and Inputs
Feed cost (grain, hay), fuel, vet & health management, labor in remote areas, all carry premium and risk. Raising animals in mountainous regions can amplify these costs. - Regulatory & Environmental Pressures
Issues like wildfire risk, grazing regulations, wildlife interactions (predation, grazing restrictions), and environmental compliance (water, soil, conservation easements) can affect operations more severely than in flatter areas of the country. - Risk from Animal Health & Disease Events
Local outbreaks or events (e.g. pest/disease spread) could have outsized effects, especially given the thinner margins and tighter supply elsewhere. Ranchers must stay vigilant.
What the Data is Saying Right Now
- In Colorado livestock auctions, feeder cattle over 600 lbs traded at weighted averages in the mid-$300s per cwt in recent reports.
- Slaughter cows are seeing varying prices, but there is some softness in dress slaughter animals, reflecting sometimes local feed cost / transport / demand differences. USDA Cattle USDA AMS Report Oct 16
- The USDA’s outlook suggests beef production will be down in 2025 vs prior forecasts due to reduced placements and declining supply of beef cows and replacement heifers.
What Ranchers in Western Colorado Can Do: Strategies & Opportunities
Here are some suggestions that may help local ranchers maximize return or mitigate risk under current conditions:
- Evaluate Heifer Retention vs. Market Sale
With high cattle prices, there’s more incentive to retain heifers and rebuild herd numbers. But that comes with cost — feed, grazing, holding until breeding age. Projection of input costs vs expected returns is critical. - Play the Quality Game
As demand holds for higher quality beef (marbling, weight, finish), ranchers with genetics and management to produce premium product can capture better margins. Selective breeding, good nutrition, and stress minimization count. - Manage Cost of Gain Carefully
Given current feed/grazing constraints and cost volatility, closely monitor the cost vs gain schedule. Where feed is expensive, stretching grazing or optimizing backgrounding may yield better return than pushing for rapid weight gain. - Use Local Auction & Direct Marketing Channels When Possible
Nearby auction prices can give benchmarks, but sometimes direct marketing (selling to processors, local beef demand, or niche markets) can allow better capture of value (less transportation, fewer middlemen). - Contracting / Price Hedging
When feasible, explore forward contracts or price risk management tools. Locking in favorable feeder or live cattle prices now may hedge against downside risk if supply improves and prices soften. - Diversify Grazing & Feed Sources
If possible, diversify where feed and grazing come from: lease grazing in different zones, make hay in good years to buffer lean years, consider rotational grazing to maintain pasture health and reduce supplemental feed need. - Monitor Policy, Trade, Health Signals
Stay current on disease outbreaks, import restrictions, tariffs, and environmental regulation. These can shift margins or disrupt supply unexpectedly.
Looking Ahead: What to Expect in 2026
Based on current data and expert forecasts:
- Prices likely to remain elevated, especially if the herd rebuilding is slow and feed costs stay high. Read the Data from the USDA
- Beef production may stay down relative to what many had anticipated, especially in late 2025 and through 2026, due to fewer feeder placements and fewer beef cows/replacement heifers.
- Potential for volatility: weather, input costs, trade policy, and disease events are wildcards. Ranchers who can stay flexible and manage risk will likely fare better.
- Signs of herd rebuilding may begin, but expect that process to be slow. Because gestation, breeding, raising replacement heifers, then finishing, all take time, even optimistic scenarios play out over years, not months. Dive Deeper
Bottom Line
For ranchers in Western Colorado, we see 2025‐2026 as a period of opportunity but also of risk. The high cattle prices (for feeders, live cattle, and beef retail) are favorable, especially for those who can manage costs and produce quality. But costs, weather, and supply constraints won’t loosen up easily or quickly.
If you are considering whether to retain more females, invest in genetics, or hold off sales in hopes of higher future prices, do so with close attention to grazing and feed costs, and have fallback plans in case of shocks like exceptional dry periods or sudden change any input costs due to changing regulatory or macroeconomic conditions.
