USDA’s annual inventory of cattle shows the number of all beef and dairy cattle and calves in the U.S. on Jan. 1 was slightly higher than a year earlier. At nearly 94.8 million, the tally increased 461,700 head year over year.

The number of beef cows and calved heifers at 31.8 million was up 1% and nearly 300,000 head, the National Agricultural Statistics Service reported on Thursday.

Beef replacement heifers at 5.9 million was down 3% and about 283,000 head. The 2018 calf crop at 36.4 million was up 2% and about 644,000 head.

Cattle on feed in all U.S. feedlots, including small feedlots, at 14.4 million is up 2 percent.

The report held no major surprises and confirms what the industry had expected, Derrell Peel, livestock marketing specialist at Oklahoma State University, said.

Beef herd expansion is slowing, and cattle numbers are approaching a plateau, he said.

“The beef cow-herd number was a little bigger than some expected but not enough to change the story,” he said.

There might be a little more growth in cattle numbers next year, but it will be minimal if it happens. Beef replacement heifers were down last year as well, and the report reinforces that herd expansion is slowing to a point that there’ll be little to no change in cattle numbers, he said.

The report also contained the quarterly cattle on feed numbers, which showed more heifers on feed for the 12th quarterly report in a row, he said.

“It’s all consistent with a slowdown in expansion. The report really provides a little certainty to the story,” he said.

The 2018 calf crop was up and the 2019 calf crop should be slightly larger, so there are ample feeder supplies in the pipeline through 2020 — leading to modest increases in beef production this year and in 2020, he said.

The report was also no surprise to John Nalivka, owner of Sterling Marketing in Vale, Ore.

“It matches my projections pretty closely,” he said.

He did, however, expect the number of beef replacement heifers expected to calve in 20019 to be larger. Those heifers were retained in 2017 and bred in 2018, and 2017 was a pretty good year for cow-calf producers, he said.

“I thought maybe there’d been more motivation to hold back heifers and continue expansion,” he said.

But heifer slaughter was up 6% last year and up 12% in 2017. In addition, cow slaughter was up 6% last year and 7% in 2017. Those significant increases put things in perspective, he said.

“You can’t be slaughtering that many cows and heifers and not be putting the brakes on expansion,” he said.

But 2018 was a pretty good year for cow-calf producers, with about a $160 per cow return on a cash basis. So producers might have held more heifers back for replacement last fall, he said.

“If prices hold together this year and demand is good, we might slowly build the herd again,” he said.