As of Tuesday, Select beef closed at $203.56/cwt., and Monday was the first day for Select to average over $200/cwt. Meanwhile, the Choice-Select spread remains narrow, but Choice is approaching all-time highs as well. Last spring, Choice crossed the magical $200 barrier.
The predictions about short supplies are materializing in a significant way. The timing of the holiday and the severe cold weather conspired to make the production estimates be even lower last week than they might have been, but production was down nearly 60 million lbs. compared to the same week a year ago.
Not surprisingly, fed cattle set an all-time record high last week. And prognosticators are calling for record highs for bred females, calves and bulls this year as well. With improving moisture and falling corn prices, things look so good that I am tempted to predict that Democrats and Republicans will work together to reduce the deficit and set the country on a sustainable path. On second thought, perhaps we should be content with green grass and record prices.
That reminds me of a joke about a rancher walking in his pasture and finding a lamp. He rubs the lamp to remove some dirt and a genie pops out and offers him one wish every year for three years.
The rancher quickly wishes for belly-high grass and 700-lb. calves, and ends up with more grass than ever before and record weaning weights.
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The next year, the genie returns for the rancher’s second wish. The rancher asks for $2/lb. calves, which the genie grants before leaving. In the third year, the genie returns, greets the rancher and says, “Okay, you’ve had your best calf crop ever and record prices, what do you want for your third and final wish?”
The rancher looks down, scuffs the dirt with his boot, and quietly asks for $2 calves again. The genie scratches his head, and says, “I don’t understand, you had that last year.” Sheepishly, the rancher says: “I know but I never sold them; I held out for $2.05.”
I think there’s a moral in that story somewhere.
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