Cattle futures climbed to a record as U.S. beef production is forecast to drop to an 11-year low in 2014 while the improving economy signals increasing meat demand.
U.S. beef output will fall 5.7 percent from 2013 to 24.205 billion pounds (10.98 million metric tons) next year, the lowest since 1993, the Department of Agriculture has forecast. Feedlots added 3.1 percent fewer cattle last month than a year earlier, reducing the total inventory to the second-lowest for Dec. 1 since the USDA started collecting data in 1996, government figures showed on Dec. 20.
The USDA this month boosted its outlook for 2014 per capita beef consumption by 0.6 percent. The American economy will expand 2.6 percent next year from 1.7 percent in 2013, according the median of 78 forecasts compiled by Bloomberg. Higher beef prices will raise costs for retailers from Hormel Foods Corp. to Jack in the Box Inc., while grocery shoppers will pay as much as 3.5 percent more for the meat next year, the government projects.
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