January 14, 2008

US reports high cattle inventories, but weights down on high feed costs

High cattle inventories in December are expected to boost beef production at the start of 2008, yet high feed costs will limit weight gains and increase prices.

The USDA, in its World Agricultural Supply and Demand report, raised the average 2008 price forecast for choice steers (1100-1300 pounds) by US$1.00 to a range of US$88 to US$95 per hundredweight from last month's forecast of US$87 to US$94 and compared to an estimated US$91.82 in 2007.

The department also increased its 2008 beef production forecast slightly to 26.1 billion pounds from 26 billion forecast in December, although still below the projected 26.4 billion pounds output in 2007.

The 2008 beef export forecast remained at 1.71 billion pounds, compared to an estimated 1.45 billion pounds in 2007.