Commercial ranches absorbed cowboys into their expanding operations. Spaniards had originally imported cattle into the Southwest, and by the late nineteenth century some 5 million Texas longhorn steers grazed in the area. Cattle that could be purchased in Texas for $3 to $7 fetched a price of $30 to $40 in Kansas. The extension of railroads across the West opened up a quickly growing market for beef in the East. The development of refrigerated railroad cars guaranteed that meat from slaughtered cattle could reach eastern consumers without spoiling. With money to be made, the cattle industry rose to meet the demand. Fewer than 40 ranchers owned more than 20 million acres of land. Easterners and Europeans joined the boom and invested money in giant ranches. By the mid-1880s, approximately 7.5 million head of cattle roamed the western ranges, and large cattle ranchers became rich. Cattle ranching had become fully integrated into the national commercial economy.

Then the bubble burst. Ranchers who were already raising more cattle than the market could handle, increasingly faced competition from cattle producers in Canada and Argentina. Prices spiraled downward. Another source of competition came from homesteaders who moved into the plains and fenced in their farms with barbed wire, thereby reducing the size of the open range. Yet the greatest disaster occurred from 1885 to 1887. Two frigid winters, together with a torrid summer drought, destroyed 90 percent of the cattle on the northern plains of the Dakotas, Montana, Colorado, and Wyoming. Under these conditions, outside capital to support ranching diminished, and many of the great cattle barons went into bankruptcy. This economic collapse consolidated the remaining cattle industry into even fewer hands. The cowboy, never more than a hired hand, became a laborer for large corporations.