Sort & Cull

While there are certainly areas in the country that don't have to be reminded what snow looks like, most of us would agree that, as merciless as the North wind has been known to blow, the 2016-2017 winter has been remarkably open. Knock on wood.

I know. There's still plenty of time for the season to rage with freezing temperatures and sheets of ice. Yet the calendar is definitely listing toward spring. I think I'll risk awakening OMW from his snore fest in order to point out several market-related developments that might have spun differently had road crews put in more overtime.

First of all, take note of the amazing performance of wholesale beef over the last three weeks. As a rule of thumb, beef typically moves through February like Sean Spicer slashing his way through the New York Times Christmas party. Not a pretty picture.

Yet, welcome to the new normal, I guess. This February saw the choice and select cut-outs explode by $20 and $10, respectively. My guess is that a good part of that unusual strength was related to aggressive export buying. But some of it may have been prompted by mild weather conditions, spurring early bird anticipation of strong consumer grilling interest in the second quarter ahead.

Many of you are no doubt thinking I'm jumping the gun. You could be right. Anyone who thinks he feels the pangs of spring fever this early probably just has a bad case of Influenza A. But before you send me packing for the sanitarium, take a look at how rib and loin primals (the foundation of the grilling season if there ever was one) have skyrocketed.

In just two weeks, the choice rib primal has rallied from $285 to $309, an incredible surge of more than $24. At the same time, the choice loin primal has exploded from $257 to $291, a leap forward of nearly $34. Seasonally, these red-hot middle cuts should be the drivers of beef carcass values for another 30-60 days. But I would argue at this point that open winter conditions are at least playing a part in jump-starting seasonal demand typically related to the heart of grilling interest in late spring and early summer.

For more of John's commentary, visit http://feelofthemarket.com/…

(ES)

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