SÃO PAULO, Brazil – JBS S.A. officials expect cattle prices to reach record highs in 2013 as beef production declines, according to a Reuters report.

Wesley Batista, CEO of the company, said in an interview that beef output will ease as much as 6 percent in 2013, and that cattle prices will advance 20 percent. The US Department of Agriculture is forecasting a 4.2 percent decline in beef production.

Surging feed costs spurred by the worst drought in 50 years increased the cost of raising cattle, prompting ranchers to cull cattle. Batista told Reuters that ranchers will probably rebuild herds next year, which means more animals will be kept on feed instead of being sent to slaughter.

Meanwhile, average retail steak prices climbed to more than $4 per lb. in October, according to USDA. Reuters said the price of steak has jumped 19 percent in two years on droughts in 2011 and 2012 that have damaged rangeland in Texas, the country’s biggest cattle producer.