The steer-heifer price difference: Implications for herd expansion

The price difference between steers and heifers has long been a focal point for cattle market analysts, cow/calf producers, feedlot operators, and other industry stakeholders, providing insights into market trends, herd expansion, and feeder cattle demand. Herd expansion remains a lingering question and a topic of ongoing debate in 2025. Unlike previous cyclical shifts, current industry headwinds are becoming increasingly relevant as the industry continues to define the trough of the ongoing cyclical contraction. Amid various confounding factors, revisiting the steer-heifer differential provides important clarity in reevaluating this question.

Heifer calves are typically discounted relative to their steer contemporaries due to their growth variability, reduced feeding efficiency, and tendency to finish at lower weights. The differences in performance justify the premium for steer calves. The discount fluctuates based on the total supply of feeder cattle available for placement in feedlots and the demand for heifers as replacement cattle — both influenced by the cattle cycle and seasonality — and can also vary across weight classes. The price disparity typically widens during the contractionary phase of the cattle cycle due to a surplus of females entering the market instead of being retained as potential breeding stock.