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Cattle Rallies to Record as Beef Supply Shrinks Before Christmas

Cattle futures extended a rally to a record amid shrinking supplies of U.S. beef and increasing demand for the meat as grocers boost purchases before the Christmas holiday.

U.S. commercial beef output in the 10 months through Oct. 31 fell 1.1 percent from the same period in 2011, the government said in a report today. The herd as of July 1 shrank to the smallest since at least 1973. Ranchers culled herds after the worst drought since 1956 eroded crop yields, sending corn, the main ingredient in feed, up as much as 68 percent since mid-June.