"A succession of storms accompanied by cold temperatures drove feeding costs higher, slowed weight gains, and reduced fed cattle marketings, leading to a dramatic drop in beef production," said James Mintert, livestock marketing specialist with K-State Research and Extension. "If weather conditions in the Plains states remain wintry during March, beef supplies will stay very tight and western Kansas slaughter cattle prices are likely to remain above $80. Conversely, if the weather moderates, prices could drift back into the upper $70s by late March or April."

The jump in cattle prices spelled profitability for cattle feeders, said Extension agricultural economist Rodney Jones.

"Profits returned to cattle feeding on December closeouts. For example, the average December steer closeout in Kansas generated a profit of $39.39 per head," said Jones. The returns stemmed from an average break-even price of $73.62 combined with a monthly average selling price of $76.73.

"Preliminary estimates suggest strong profits on early 2001 closeouts, averaging in the $60 to $70 per head range," he said. "Breakeven levels on current closeouts are around $73.50 to $74.50 per cwt, with selling prices topping $80."

Profits are expected to decline by summer, however, as futures-based price forecasts suggest significant declines in fed cattle prices by then.

The recent reductions in steer and heifer slaughter, are not sustainable, Mintert explained, given that the U.S. cattle on feed inventory has been 1.5 to 3.2 percent above a year ago all winter. So the recent year-to-year reduction in the beef supply is likely to moderate by late spring.

When this occurs, western Kansas slaughter cattle prices will decline into the low $70s by late June or early July, he said.

"Moreover, if beef demand weakens at all as the economy slows and consumers continue to adjust to higher energy costs, there is a chance cash prices could actually dip below $70 this summer. Slaughter cattle prices are expected to recover seasonally this fall, into the mid to upper $70s."

June live cattle futures on the Chicago Mercantile Exchange closed at 73.68 cents per pound [the equivalent of $73.68 per cwt] on March 9, while August futures settled at 72.75 cents.

But fall futures hinted at a rebound, with October settling at 74.75 cents a pound and December at 75.80 cents.