Record Choice-Select Spread Emphasizes Opportunity For Quality Beef ProductionWed, 14 Mar 2012 15:48:01 CDT
When one of the leading indicators of demand for quality in beef products doubles in a year’s time, that’s a pretty good indication the market is changing and signaling an opportunity. From the last half of 2010 to the last half of 2011, the difference between choice-grading beef and select, the choice-select spread, jumped from an average of $6.44 to more than $12.
Tom Brink of J&F Oklahoma Holdings says more retailers are increasing the quality of their beef offerings. The increased demand for quality cuts and the fact that fed cattle supplies are tight has driven the choice-select spread higher.
He says he expects the spread to remain in record territory in large measure due to export demand.
“Foreign demand emphasizes higher grading product. As exports grow they tend to grow more for the choice and higher grading product. So we’re going to see a wider choice-select spread going forward.”
An enduring wider spread challenges producers to buy a little bit better grading cattle, if possible, Brink says. Sourcing cattle with better genetics is somewhat easier to do as there are larger numbers of Angus-based cattle available.
In the end, he says, proper management in the feedlot can make a difference as well. Producers can feed longer trying to increase choice percentages.
Improvement is the key, Brink says, and with the wide choice-select spread settling in, cow-calf producers who are should have ample opportunity to build on their improvements.
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