Another Year of Shrinking Beef Production Coming Up

Good news for cattle producers as they can expect to see another spike in prices next year as the herd shrinks and beef production continues its decline. Although next year most likely the U.S. will produce about 24.2 billion pounds of beef -- that's 115 million pounds more than previously forecast or about a half a percent it is less than last year.

USDA World Outlook Board Chairman Gerry Bange says

Bange: We've noted that somewhat more animals than we though have been placed in feedlots in 2013 and they will be coming out in 2014.

Bange says that even though production is a little more than expected.

Bange: "It is down nearly six percent year to year so it is still a fairly sharp decline."

Cattle herds continue to shrink and of course cattle prices continue to climb for 2014 Bange expects an average steer to fetch $132.50 a hundred weight.

Bange: "That's an increase of about 5.3 percent over last year and really what it reflects is a strong demand for beef and relatively tight supplies."

It will send retail beef prices to record prices as well.

Last Friday the December USDA Cattle on Feed Report was released and was neutral-to-bullish. Placements" were actually lower than expected at 97 percent versus last year. Pundits believe this simply shows more cattle were allowed to graze longer and were held out of the feedlots.