Even though consumer demand for beef is strong and seems to be expanding, "We're still in the contraction phase on the cattle cycle," noted USDA chief economist Seth Meyer.

Meyer said beef cattle producers are cutting back on breeding animals; this past year's calf crop was smaller than the year before. Beef production in 2022 is expected to be about 3% less than this past year.

"We might have a couple years of continued decline in beef production as decisions made today still have to make their way into the system," Meyer noted. "And those steer prices are seeing a pretty good increase expected in 2022.

With steers expected to average $135.25 in 2022, and compared to '21, that's about a 10% increase.

"As we cut supplies and really hold onto that demand," Meyer continued.

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