However, it is the responsibility of the entire beef cattle community to be on the watch for any food safety or consumer perception concerns that can burst the bubble, as history has proven.
Tales of high-priced cattle are told, only to be trumped by the guy at the next table, but all-time record highs were posted once again on most all classes of feeders at most all locales across the country in January.
The market on steer calves weighing near 500 pounds percolated to the $2-per-pound level in the Midwest and once this resistance point is routinely broken, then the sky will officially be the limit.
The opportunity cost of pasture land is high and inputs continue to be more expensive, but weaning $1,000 to $1,200 calves has renewed the cow-calf man’s faith in the industry being able to keep up with other enterprises.
The early-year demand for replacement-quality heifers dramatically tightened the steer-heifer spread, which had been lagging throughout the fall and early winter run.
Word is out that it is time to start rebuilding our herds, which are not only depleted in the drought areas of the Southern Plains, but are running short nationwide from producers putting off heifer retention for economic reasons.
Last year’s cattle market surge has obviously renewed the interest in replacement females, which will only make the supply of market cattle even tighter for the next few years.
The cost of a spring-calving bred heifer has risen up to and past $2,000 and the open heifer market would make it tough to grow and breed one cheaper than that for next spring.
Heavier feeder cattle (over 700 pounds) saw a more tempered increase in prices early in the year as on-feed inventories remain large for the time being and there have been very few true yearlings on the market since late fall.
Feedlots will need to replenish pen space in late winter and early spring and cattle feeders will find it even harder to show profits, which have been scarce even as fat cattle prices reached new record highs.
Margins are even tighter and the investment is even poorer for cattle feeders, especially with feedlot replacements costing roughly a third more than in recent years.
Fed cattle futures don’t show a significant price increase until late summer, and at current feeder cattle prices, the feedlots will definitely need it.
Unfortunately, fat cattle market advancement of late has not been obtained by feedlot leverage or managers driving such a hard bargain on packers.
In fact, negotiated cash sales of finished steers and heifers in the Five Area feeding region (Texas, Kansas, Colorado, Nebraska and Iowa) made up only 36.8 percent of the total volume in 2011.
The balance of the direct slaughter cattle sales were some type of formula arrangement, mostly derived from the evaporating cash business (otherwise known as the tail wagging the dog).
Texas had the smallest percentage of cash sales with only 17 percent of their total, while Iowa boasted near 62 percent from a heavy influence of independent farmer feeders. If beef demand should weaken, market levels may be difficult to maintain without competitive price discovery. 
