In its quarterly beef report last week, Rabobak says smaller beef and cattle supplies in the coming year should increase both prices to record highs.
Record grain prices brought on by this year's drought caused widespread herd liquidation, which in turn caused higher beef and cattle prices. And yet, Rabobank reports that consumer demand for beef has been steady.
This past March, slaughter-ready cattle traded at a record $130 per hundredweight, and Rabobank predicts slaughter-ready cattle will trade between $140-145 per hundredweight next year.
However, with high feed costs producers will sell cattle at lower weights, thereby producing less beef.