Two years after University of Kentucky Livestock Economist Kenny Burdine introduced the “3 Ps of Herd Expansion” — profit, pasture and patience — the framework remains the most accurate lens for understanding why rebuilding the U.S. cattle supply remains an uphill battle.
According to James Mitchell, University of Arkansas extension livestock economist, the concept has become essential in navigating today’s market volatility and policy discussions.
“In an October 2024 Cattle Market Notes article, Kenny wrote about the ‘3 Ps of Herd Expansion,’” Mitchell explains in a recent Cattle Market Notes Weekly article. “I have gone back to that article several times recently and borrowed the phrase to answer questions about cattle markets and all the policy uncertainty we have seen. Two years later, I think the 3 Ps are still a useful way to think about where we are with U.S. herd expansion.”
Profit: Lucrative Cash, Volatile Futures
On paper, the economic incentives for producers are stronger than ever. The Livestock Marketing Information Center (LMIC) projects 2026 cow-calf returns over cash costs at $1,037 per cow, building on $962 per cow in 2025 and $467 per cow in 2024.
“Record cattle prices and historically tight supplies have created some of the strongest returns cow-calf producers have seen in years,” Mitchell notes.
However, paper profits can obscure underlying market risk. Since July 1, the October feeder cattle futures contract has plunged $42.28 cwt., wiping out more than $21,000 in total value per 50,000-lb. contract.
“The last two months have also been a reminder of how quickly things can change,” Mitchell warns. “Producers thinking about retaining heifers are not making that decision based only on today’s calf price. They are giving up significant income today for calves they hope to sell several years from now. The events of the past two months have added a lot more uncertainty to those future returns.”
Pasture: High Prices Can’t Make It Rain
Even when producers are eager to expand, forage deficits often make the decision for them. The first week of September, USDA reports 53% of U.S. pasture and range in poor or very poor condition — a steep increase from 35% a year prior and well above the five-year average of 41%.
The situation is most acute in the Southern Plains, where 65% of pastureland sits in poor or very poor condition, compared to 25% in the Southeast.
“Pasture conditions and forage production have become a much larger concern as the summer has progressed,” Mitchell says. “High cattle prices cannot overcome drought. Producers need adequate forage to retain heifers and carry additional cows, and drought can stop herd expansion regardless of what the economics might otherwise suggest.”
Patience: Biological Realities vs. Policy Demands
Against the backdrop of high retail beef prices, recent policy proposals have pushed to quickly ramp up cattle numbers. However, Mitchell stresses market desire and biological capacity operate on fundamentally different schedules.
“Over the last two months, we have seen several policies aimed at addressing high beef prices while also talking about rebuilding U.S. cattle supplies,” Mitchell says. “We want more beef and more cattle, and those two things operate on very different timelines. Even if policies encouraged widespread heifer retention today, those heifers still have to be bred, calve and raise a calf that moves through the beef production system.”
Under the most optimistic conditions, an increase in domestic beef volume resulting from current heifer retention will take two to three years to materialize.
“Kenny’s 3 Ps are a useful way to think about herd expansion,” Mitchell summarizes. “We have profit, but the last two months have shown how quickly expectations can change. Pasture has become a much bigger problem as drought has expanded. But patience may be what we are shortest on. If we want a larger domestic cattle herd, we have to accept that rebuilding takes time. There is no policy that changes the biology of the cattle cycle.”
