LUBBOCK, TEXAS (RFD NEWS) — An inverted Choice-Select spread is drawing attention in cattle markets, but Don Close of Terrain says the signal no longer means what it once did. He argues that today’s beef mix has changed so much that the spread is now a poor measure of whether consumers are trading down to a lower-quality product.
Close said the old relationship mattered when beef supplies were split much more evenly between Choice and Select. At that time, retail chains commonly carried Select product, branded beef was not a major factor, and Prime made up only a small share of carcasses.
That is no longer today’s market. Retail stores now largely carry Choice and better; Prime is much more common, and Select supplies have contracted sharply. Close said the smaller Select supply itself can push prices higher and create the appearance of stronger demand.
He also said the smallest domestic cattle supply in 70 years is tightening lean beef availability, which adds support for Select product in grinding and some institutional channels. That, in his view, makes the current inversion more about supply and product mix than consumer retreat from quality.
Close said cattlemen would be better served watching a Choice-to-branded beef cutout or a Choice-Prime spread instead. He argues consumers have repeatedly shown they want higher-quality beef and are unlikely to return to a largely Select-based market.
Farm-Level Takeaway: Don Close says the inverted Choice-Select spread is not a strong warning sign in today’s tighter, higher-quality beef market.
Tony St. James, RFD News Markets Specialist
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