Evan Slack, a legendary farm broadcaster, was famous for saying “higher, higher” when the markets were trending higher, and nothing describes the summer run better than that. Each week we have seen historically high prices. Each sale has set new records, records that have stood or lasted until the next week or the next sale.

I’m writing this after the Northern Video Summer Spectacular sale. At this point we are not surprised when five-weight calves bring in the mid- to upper-$4-per-pound (lb.) range, or when yearling cattle have a first cost of $3,000 per head. “Unprecedented” and “historic” are two of the most common terms to describe the prices.

Of course, we are cattlemen, so we still question:

• How long will this last?
• How will the feeders who are buying these calves make money?
• How high will input prices be?

The answer to the first question is anybody’s guess. Historically, the highs do not occur until we see significant expansion begin. These price and profit levels will eventually lead to expansion, but heifer placements and cull-cow numbers are indicating expansion has not begun to any significant level.

This market has been primarily demand-driven up to this point; tighter supplies are just now becoming part of the equation. The bred-female market remains the one class of cattle that is not trading at all-time highs. Barring some type of black swan event, it is difficult to envision that we won’t see these price levels for at least several more years.

Relative to the second question, there is less certainty. Feeders are buying these cattle on the come (anticipating fed prices to gain on the premiums the futures market has already priced in). We were having the same conversation last year, and those cattle turned out to be very profitable for cattle feeders.

The third question is also accurate: Because of lower input prices, we are approaching record profitability levels.

When you combine all of the discussion points about the current market, the No. 1 conclusion is there is a tremendous amount of excitement — and cautious optimism. Looking at supply and demand drivers, there are not a lot of red flags. But, as a whole, we don’t want to jinx it by being too confident.

The consensus is that we are in the midst of the most extended period of significant profitability in the history of the industry. Producers are feeling blessed as they use this time to position their operations for the future. As one producer said, we only get one or two chances like this in our lifetime to really get ahead, and this is one of them. The quick rise and fall of the markets in 2014 and 2015 still lingers in producers’ minds, and that has tempered the euphoria we experienced at that time.

Looking back at this summer run, there are a few trends being amplified, including:

• Despite historically high price levels, we are also seeing historically high price differentiation. We used to see a $10 swing within 50-lb. windows for calves selling on the same day with similar freight costs. Today we are seeing $20-$40 swings. The result is that every day we are experiencing vastly different markets. Genetics are the primary differentiator in the marketplace, and that value is growing.
• Market access and market flexibility continue to add value to these calves, as well.
• Information and uniformity remain the primary differentiators in the marketplace.
• From a genetic standpoint, Angus is the undisputed breed of choice. This preference is built upon their recognized advantages in terms of marbling (quality grade) and carcass weight (yield and growth).

Producers are celebrating the current levels of profitability and are using this time to prepare for continued success in the future. The road map is pretty clear, and the market signals have never been clearer.