U.S. cattle at Its heaviest, leading to lower beef prices

The US Department of Agriculture reported that cattle in the country weighed an average of 1,390 pounds when sold, which is the heaviest or fattest they have been. This is expected to lower beef prices.

Bloomberg reported that, that the figure shows a 2.6 percent growth in just a year, which is the biggest annual increase in over ten years. Heavier cattle increases domestic beef supplies, which will lead to lower beef prices.

The USDA projected beef production in the fourth-quarter to increase by 1.8 percent from the past year. It will continue to rise 4.8 percent in 2016 to 24.85 billion pounds, the first time it went up in six years.

Cattle futures went down by 23 percent from a year ago, making producers lose money every time they send cattle to slaughtering plants. This prompted them to grow the animals larger than they normally are.

According to UPI, this will lead to more pounds of beef in stores. Later on consumers will notice a decline in wholesale prices of beef, which has already dropped 23 percent in May. It closed at $2.0279 per pound earlier this week, the lowest it has been since 22 months ago.

"If you bought a roast around three pounds, usually it would be about $22, $23," Windsor Walker Road market meat counter operator Jeffery Farron told CBC News. "You might save, like, typically a couple of dollars, or if it's put on sale, you might save even more."

Meanwhile, cheaper beef may lead to an increase in demand, which will limit the decrease of prices. The USDA expects domestic consumption to increase to 55.3 pounds a person in 2016, up from 2015's 54.4 pounds a person. Exports are also seen to rebound in 2016.

Goldman Sachs Group Inc., projects prices to average $1.30 per pound in the following three months and $1.20 per pound in the next six months as cattle futures in Chicago shows downside risk due to weaker domestic demand and declining US exports brought by the strong dollar.