Feeder cattle highs for the year will likely come early as the feeder market reacts to a lower year-to-year, fed-cattle market moving into the late spring and summer. Feeder cattle basis levels in April and May could be highly erratic due to forced early movement of wheat cattle off winter grazing programs.

When the spread is wide, packers are forced into the market — and producers have leverage. When the spread narrows, packers have the leverage.

This spread has been unseasonably wide so far in 2006, reflecting the tight available supply of market ready cattle, especially in the south.

We're still far from what I would say is a fully funded operation in maintenance and those kinds of things.