– James Mitchell, Livestock Marketing Specialist, University of Arkansas
In mid-August, Josh provided an update on U.S. beef production based on USDA’s World Agricultural Supply and Demand Estimates (WASDE) published that month. At the time, USDA projected a slight decline in beef production for 2024 compared to 2023, estimating a 1% drop. However, two months later, USDA revised its forecast, now expecting an increase in 2024 beef production. The first graph below shows USDA’s forecasts from January 2024 and October 2024, illustrating how projections have shifted significantly over the course of the year.
Despite cattle inventories declining since their 2019 peak of 94.7 million, beef production in 2024 is expected to exceed 2023 levels. USDA’s latest forecast projects a slight increase of 0.1%, bringing total beef production to 27.0 billion pounds. This lag in production response is typical of cattle market dynamics, where changes in production often do not immediately align with inventory shifts.
The second graph illustrates the relationship between cattle inventories and beef production, showing instances where production stalls despite year-over-year changes in cattle numbers. This is because current beef production reflects management decisions made by cattle producers two years prior. Consequently, 2024 beef production is largely a result of decisions made in 2021 and 2022.
The other factors contributing to the increase in 2024 beef production are well documented by now. Longer feeding periods, driven by lower costs of gain, have resulted in dressed weights significantly exceeding last year’s levels. According to the latest USDA-NASS data, steer dressed weights are averaging 950 pounds—28 pounds heavier than in 2023. The net effect of slightly lower slaughter rates combined with heavier dressed weights is an overall increase in beef production.
Looking ahead, USDA forecasts a 4% decline in beef production for 2025, consistent with smaller cattle inventories. As herd rebuilding begins, beef production is expected to decline further, with fewer heifers entering the system and reduced cow culling. This scenario will support higher cattle prices, assuming other factors remain constant.