Demand for Choice beef leads to tighter supplies and high prices.
The Choice-Select spread has widened in the last few weeks. Although it is occurring slightly early, this widening of the spread is a seasonally expected occurrence.
From a CAB production view, the temporary loss of one of our largest product sources is a concern and the marketplace will likely respond to the supply hit with some logical and some added emotional reaction.
There are several interesting storylines to go along with the widening spread.
Beef packers continued to show signs that they still need cattle to meet the demand of their customers and paid higher prices last week.
CattleFax analyst Duane Lenz told the 2019 Angus Convention attendees there could be another year or two of price pressure, but then, he’s optimistic, bullish even, for future beef prices.
Beef production has continued to run above a year ago throughout 2018.
The price uncertainty in the feeder cattle market continues to stem from the finished cattle market and uncertainties concerning how many head of cattle will be harvested in the next couple of months.