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Glenn Tonsor Says Growing Choice-Select Spread Is A Strong Demand Signal

Jun 15, 2016
By Dr. Glynn Tonsor.
Kansas State University Extension Livestock Market Economist.
 
The demand for beef is growing, as evidenced by the widest spread in Choice and Select beef since 2003, says Kansas State University Extension Livestock Market Economist Dr. Glynn Tonsor. 
 
The Choice-Select spread was at $24 earlier last week and continues to rise this week. Tonsor says that because boxed beef numbers have been declining, the decade-high prices are an even bigger deal.
 
“We could put this on percentage terms and get a quality spread signal that’s even stronger than just the $24,” he says. 
 
Tonsor says he especially wants to highlight the spread because it’s “abnormally large” for two reasons - decreasing fed cattle weights and positive demand signals for Choice beef.
 
“This signals are growing demand is strong, coupled with a little bit lower sales weights coming out of feed yards is running up, if you like, the Choice value compared to Select,” he says. “And that’s always a positive quality signal.”
 
Tonsor says the current condition is a result of both supply and demand aspects.
 
“I think the demand that comes from grilling - me, you and others that love to throw beef on the grill - we’re right in the middle of that,” he says. “The supply side is I think there is a little bit lower weights out there and we’re tightening down the availability of choice beef as well.”
 
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