Continued growth in beef production in 2018 is likely to pressure cattle and beef prices. Cattle producers have a number of economic conditions to watch that will indicate the impact of factors they cannot control and that will have implications for those factors they do control.

The latest Cattle on Feed report pegged the Dec. 1 feedlot inventory at 11.512 million head, 108 percent of last year. This is an additional 864,000 head in feedlots compared with December 2016.

U.S. domestic beef consumption is projected to be 56.6 pounds per capita for 2017, up from 55.4 pounds in 2016 (retail weight). That is a 2.2 percent year-over-year increase. Beef consumption is higher because beef production is increasing; in fact, it is projected to be up 3.8 percent year over year from 2016.

The latest weekly carcass weight data for the week ending on Nov. 18 showed steer carcass weights at 902 pounds for the third consecutive week. This is likely the seasonal peak in carcass weights and is up 70 pounds from the seasonal low of 832 pounds in early May.

Current cattle markets can be thought of as a series of bad news-good news stories. The bad news is that cash fed cattle prices pulled back last week from the highs at the end of the week before. The good news is that the jump up to $124 per hundredweight (cwt) live fed cattle prices was not expected and the current level in the $120-121 per cwt range is at or above most expectations for fed prices at this point.

The August USDA Cattle on Feed report shows an Aug. 1 feedlot inventory of 10.604 million head, 104.3 percent of last year. This is the largest August feedlot inventory since 2012.

Temperatures in Oklahoma have been unseasonably cool in the first half of the month. Temperatures are forecast to be higher late in the month but will still likely remain at or below seasonal levels.

Step one of U.S. beef exports to China is completed. The first step of opening any international market is the political process of negotiating access and agreeing on the conditions and stipulations of that access. Step one establishes the game and the rules of the game.

U.S. meat production is growing more slowly than previously expected. Many analysts have trimmed their estimates, and the USDA, in the latest monthly estimates, reduced forecasts for 2017 beef, pork and poultry production from earlier levels.

Stronger than expected April placements pushed the May 1 feedlot inventories to 102 percent of year-ago levels. April placements were 111 percent of last year, above the average trade guess though not outside the range of expectations. April marketings were 102.7 percent of last year, also above expectations and a continuation of strong feedlot marketings.