U.S. cattle are hitting record weights and the heavier trend should continue next year, but beef production will still fall short of demand and keep prices high, industry experts said.
Breeding bigger cattle is the only way to raise domestic beef supplies while ranchers struggle to rebuild the national herd, which is at its lowest level since 1951. Ranchers rushed animals to market to avoid high-priced feed caused by several years of drought. It takes around two years to raise a calf to maturity.
Processors are so desperate for meat supplies that they have stopped docking feedlots for carcass weights over 900 lbs, encouraging farmers to grow cattle bigger.
Corn prices near five-year lows and record prices of $170-plus per cwt for cattle also offer incentives, said Troy Marshall, owner of Marshall Cattle Company in Colorado. The company sells breeding cattle and retains part ownership of some while they fatten in feedlots.
Latest U.S. Department of Agriculture (USDA) data shows that during the week of Nov. 8, average steer and heifer carcasses weighed a record 903 lbs and 830 lbs respectively.
Those weights, on average, could hit 884 lbs for a steer and 808 lbs for heifers in 2015, up 12 lbs and 8 lbs respectively on this year's averages, University of Missouri economist Ron Plain said. Cattle weights typically dip in summer and winter.
Total beef production, however, is likely to be 23.7 billion lbs in 2015, down from 24.5 billion lbs this year, according to the USDA, as heifers are held back for breeding to increase cattle numbers.
And while consumption is also forecast to slip as high prices curb spending, it will still exceed production, the USDA predicts. It puts total 2015 beef consumption at 23.9 billion lbs, down from 24.8 billion lbs this year.
Per capita consumption in 2015 is seen at 52.2 lbs compared with 54.6 lbs.
"In the short term, beef demand is weaker because consumers are feeling sticker shock and looking at other proteins," said Mike Martin, spokesman for Cargill Inc, one of the country's biggest meat producers.
But tight supplies should keep beef expensive through 2015.
The USDA said on Tuesday beef prices could climb 5 percent in 2015, up from its forecast of 3.5 percent a month ago. Retail beef prices last month hit $6.24 per lb, down 2 cents from the September record, USDA data show.