The USDA NASS midyear Cattle report reveals a decrease in the U.S. cattle herd by 1%, with a 2% drop in beef cows but a 2% increase in dairy cows. The 2021 calf crop is expected to be slightly lower, and fewer beef heifers are being retained for beef cow replacement. The number of cattle in feedlots and the sex distribution of cattle on feed have also decreased. Dry conditions in pastures and ranges are affecting cattle inventory in some northwestern states, leading to increased cow culling and lower average carcass weights. Despite these challenges, fed steer prices are on the rise, with expectations for further increases in the third and fourth quarter of 2021, and beef imports, particularly from New Zealand, Brazil, Uruguay, and Argentina, have increased to the third-largest volume since June 2015, with the second quarter of 2021 seeing the largest volume of beef imports since 2015.