“A smaller inventory of cattle and calves and smaller calf crop during 2010 will likely limit the growth in beef production during 2011. USDA projects U.S. beef production during 2011 to be about 25.1 billion pounds or 2 percent less than a year earlier. This level of beef production will be influenced by any adjustments in average carcass weights and the level of feeder and live cattle imports from Canada and Mexico,” he says.

Turning to feed and forage conditions, Prevatt says the 2010 growing season of the major grain-producing regions got off to a fast start. Adequate weather conditions allowed planting to be completed in most major grain growing areas earlier than normal.

“The majority of the crop received favorable growing conditions most of the season. Harvest weather is currently adequate in most areas for a timely harvest,” he says.

If USDA’s current corn and soybean production levels are realized, both crops will be larger than in 2009. Corn and soybean futures prices have increased corresponding to the forecasted smaller crops that were projected earlier this season and improved export markets.

“Corn and soybean prices are expected to move higher in 2011 due to tight supplies worldwide and as economies recover from recession. Therefore, livestock producers should seriously consider taking steps to manage their feed purchases during the 2010 crop harvest,” advises Prevatt.

Another factor that can certainly affect feed prices and feeder calf and feeder cattle prices is the level of export demand for corn and soybeans, he adds. “Any major changes in world export demand for these commodities could significantly move market prices. The recent crop failures in Russia and Western Europe due to the drought will significantly reduce grain supplies and increase world grain prices. Additionally, the strength of the U.S. dollar is certain to influence world export demand.”

Fortunately, says Prevatt, pasture and range conditions have been better over many of the cow-calf states this year. “However, high input costs moderate feeder calf prices, and marginal milk prices have resulted in a large number of cull cows moving to slaughter this year,” he says.

Total 2010 U.S. hay production is expected to be marginally larger than a year ago, with most Southeast states showing comparable levels of hay production compared with 2009. “However, high input costs will likely result in continued high hay prices. Thus, alternative winter forages and feedstuffs will be in much demand this winter as cattlemen seek to feed their cow herds.”

Beef demand has felt some challenges the last two years due to less interest in protein diets, higher unemployment, and tightening consumer grocery budgets due to the higher cost of living, notes Prevatt.