For beef producers who have weathered two years of drought and related challenges, there was a feeling of optimism as they assembled in Santa Clara for the annual meeting of the California Cattlemen's Association (CCA).

Monterey County beef producer Kevin Kester, who wrapped up his term as CCA president at the meeting, says he expects beef prices to remain "very solid, if not potentially breaking all-time record highs going into next year."

A Closer Look: Record Prices, Inputs Ahead For Feedlot, Cow-Calf Sectors

A declining U.S. beef cattle herd and smaller cattle numbers in California fuel the prospects for continued high prices.

The National Agricultural Statistics Service (NASS) will release its next statistical report on cattle numbers in January. According to its midyear report, the number of cattle and calves in the U.S. totaled 97.8 million head on July 1. That's 2% less than a year ago. Overall, it's the smallest cattle inventory since the agency began a July count in 1973.

"I think the report that comes out in January will show a decline in the California beef numbers. And obviously across the nation we will have a substantial reduction in beef cow numbers," Kester says.

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