Good evening!  It was a fairly quiet day in the futures market today, but that doesn't mean we have nothing to talk about.  To the contrary, I have some VERY interesting stuff for your evening enjoyment.  May I suggest pairing this blog entry with a glass of tawny port, or perhaps a silky smooth bourbon and water?  Okay, okay.  If Keystone Light is all you have . . . .

I never cease to be amazed by the wonderful geographical spreads that we enjoy day in and day out in the cattle markets.  Check this out:

Ericson, NE, Saturday May 2, AD 2009
SELL 588# Med-Lrg 1 steers @ $123.88 = $728.41 per head

Oklahoma City, OK, TODAY
BUY 556# Med-Lrg 1 steers @ $113.39 = $630.45 per head 

So, we're looking at a $98 per head difference between the two locations on top-quality five-weight steers.  Let's cut that in half just to silence the Whimpering Wilmas (trucking! quality differential! commission! Swine flu!) and we're still $48 per head to the good. 

That was a steer-for-steer swap.  What if we bought back heifers?

 Ericson, NE, Saturday May 2, AD 2009
SELL 588# Med-Lrg 1 steers @ $123.88 = $728.41 per head

OKC TODAY
BUY 525# Med-Lrg 1 heifers @ $106.00 = $556.50 per head

Now we're looking at a $172 per head difference.  If we give that a SEVENTY-FIVE PERCENT HAIRCUT, just purely for the sake shutting Whimpering Wilma up, we're still $43 per head to the good. 

Now THIS is my favorite.

 Ericson, NE, Saturday May 2, AD 2009
SELL 588# Med-Lrg 1 steers @ $123.88 = $728.41 per head

OKC TODAY
BUY 867# Med-Lrg 2 heifers @ $75.00 = $650.25 per head

We're $78 per head to the good.  Heck, let's just say that $78 covers the haul, commission and quality differential, AND we have leapfrogged over 279 pounds of gain.  If a guy finishes cattle and his gain cost is running $0.80 per pound, he just bypassed $223 in gain costs on this animal unit.  That ain't sofa-cushion money, youngsters.  Sadly, most feedyard managers and owners are so helplessly addicted to the mainstream forecasters and their macro-economic Snake Oil that they will never do this, and ridicule anyone who had the boldness and courage to do it.  Just remember that $223 per head savings in gain costs equates to over $17.50 per hundred on a 1250# fat animal. 

But, no, we should all sit around and talk about the price of Select Chucks and 90-10 ground beef.  After we're done talking about that, maybe we can talk about tenth-of-a-point fluctuations in retail beef demand.  After we're done talking about that, maybe we can discuss placement patterns and seasonal trends in cattle on feed numbers.  After we're done talking about that, maybe we can all just smoke a big marijuana cigarette and ponder our own feet.  IT'S ALL THE SAME.