This year will bring further declines in U.S. beef supplies, and total meat and poultry supplies also will fall short of last year according to the latest World Agricultural Supply and Demand Estimates (WASDE). The WASDE projections for 2013 beef production are increased slightly from those in the December report, but remain well below those from the past two years, and prices are likely to continue moving higher as a result.

The January report projects 2013 U.S. beef production at 24.8 billion pounds, compared with an estimated 25.9 billion for 2012 and 26.2 billion for 2011. Red meat production, projected at 48.4 billion pounds for 2013 is down from an estimated 49.4 billion in 2012 and 49.2 billion for 2011. Total 2013 meat and poultry production, projected at 91.7 billion pounds, is down from 92.9 billion pounds last year, in spite of small projected increases in pork and poultry production,

The report estimates 2013 beef exports at 2.4 billion pounds, down from 2.5 billion pounds last year. 2013 beef imports will increase to 2.6 billion pounds compared with 2.2 billion in 2012. Overall shorter supplies will result in lower per-capita beef consumption this year – 55.4 pounds compared with an estimated 57.4 pounds last year.

Total per-capita meat and poultry consumption, estimated at 200 pounds for 2013, is two pounds lower than 2012’s estimate of 202 pounds.

Based on shorter supplies, the report projects higher prices for finished cattle throughout 2013, with quarterly estimates of $124 to $130 per hundredweight during the first quarter, $124 to $132 for the second, $125 to $135 for the third and $127 to $137 per hundredweight during the fourth quarter.  For the year, the report estimates an average price between $125 and $134 per hundredweight, compared with an estimated average of $122.86 last year and $114.73 in 2011.

The 2013 cattle inventory report, due for release on February 1, should provide additional insight into supplies of feeder cattle and beef production over the next few years. There have been some signs of increased heifer retention in areas where moisture and forage supplies are adequate. If producers kept more heifers from last-year’s calf crop, or intend to do so this year, supplies could decline further in the near term. Herd expansion eventually would lead to growing supplies, but due to the long production cycle in cattle, the first years of an expansion phase cause tighter supplies of feeder and finished cattle.

Read the full WASDE report from USDA.