"Larger crop and forage production would increase availability and lower prices of these critical feedstuffs," he says. "Given the small size of the calf crop, this would bolster calf prices.
"A second condition beef producers would like to see before expanding is some assurance that feed prices will have an overall moderation in coming years - not just a one-year decrease."
Low per-capita beef supplies combined with an improving U.S. economy indicate that cattle prices could be strong in coming years, giving producers hope and thoughts of expansion, Hurt said. According to the USDA report, the number of replacement heifers is up 2 percent.
"If weather helps restore feed and forage supplies this summer, a more aggressive expansion of beef heifers should be anticipated beginning in the fall of 2013 and continuing into 2014," he says. "Cheaper feed and increased heifer retention will set the stage for very strong calf prices and new record high prices for finished cattle in 2014.
"If crop and forage production return to near normal, the cattle industry is poised for multiple years of favorable returns and expansion."
While drought conditions have improved in the eastern Corn Belt, much of the western Corn Belt is still suffering severe, extreme and exceptional drought. Beef producers in those areas are unlikely to expand operations until weather improves.
And, Hurt says, beef producers aren't the only livestock sector waiting for improved feed supplies to expand.
"Unfortunately for the beef industry, both poultry and pork producers are waiting at the start line, as well," he says. "Those industries can expand production much more quickly and will extract market share from beef during the period from late-2013 to 2016."