Unprecedented and historic. I’ve heard those two words at every sale this summer. Sometimes they were used in combination. Ironically, every time I heard them used, they were pretty much 100% right. We have never seen these price levels, so the enthusiasm and excitement are justifiable and understandable.

For most cattlemen, the time frame 2023 to 2028 will be unprecedented not merely because of the price levels and profitability, but because of its duration. Barring some type of black swan event, it will be historic from a dollar and a length standpoint. People will have an opportunity to position their operations for a future that looks exceedingly bright, with beef demand moving in the right direction.

With that said, we can also be assured margins will tighten, input prices will continue to increase and barriers to entry to our business will grow.

While all segments of our business have been profitable, tighter supplies will shift the leverage to the cow-calf producer. While it has been an incredible period for the packing and feeding segments of our industry, history tells us their margins will turn red at some point as the industry begins to expand.

There is a case to be made that we will not see the type of expansion we have seen in the past, and that the cattle cycle is softening — with lower peaks and shallower bottoms. However, the cyclical nature of our business is something we can count on with almost as much certainty as death and taxes.

We are all enjoying the current market, but we also understand at some point it will moderate. The market tends to evolve the most as we transition into the next portion of the cattle cycle. There are some clear-cut signals in today’s market that have ramifications for all of us as we prepare for the future.

There are some clear-cut signals in today’s market that have ramifications for all of us as we prepare for the future.

There are givens, like health, lot size, freight and condition. They are not going away. Health, management and condition of the calves are nearly standards at this point. The industry does not offer much in the way of premiums for them, only discounts if you fail to meet industry expectations.

Lot size and location are economically relevant and easy to figure. While their importance is not likely to decline, in the end there is not a whole lot an individual producer can do to change these market drivers.