(This outlook report was presented at the recent 29th annual Agribusiness Management Conference in Fresno, Calif., sponsored by the Center for Agricultural Business, California Agricultural Technology Institute and the Jordan College of Agricultural Sciences and Technology at California State University Fresno)

Beef cattle rank fifth in California's agriculture economy at $1.82 billion in value of production.

In 2009, California had 620,000 beef mother cows, slightly down from 655,000 in 2008. California's beef industry is dominated by small cow-calf ranches that are family owned and operated. California has relatively few feedlots and packing houses and California is a net exporter of beef cattle for feeding and processing.

Estimates for U.S. beef in 2010 include: 1.4 million fewer cattle and calves (down to 93.1 million), 1.2 million fewer head being slaughtered (down to 32 million), and 800 million fewer pounds marketed (down to 25.2 billion pounds).

After three years of drought, normal precipitation returned to California in 2010, helping forage growth and cattle gains. Live cattle prices were relatively high, but producers face competitive disadvantages due to variable input prices, regulatory burdens, higher freight and shipping costs, and sluggish economic conditions.

Demand appears to have stabilized and may be improving even as retail prices are expected to reach record levels. However, the U.S. beef herd is expected to continue to contract and this reduction in supply may result in higher prices for those in the industry.

Export growth is expected as Asian demand for U.S. beef has increased. At the same time, imports are expected to decrease as the global cowherd continues to decline.

Prices for feeder cattle and fed cattle all experienced increases in 2010 and increases are expected in 2011. Prices for calves are expected to increase in 2011 from the lower levels of the previous year.