Smiles have been much easier to come by lately because of positive margins in every sector of the beef industry. However, only two indicators out of the eight measured in Drovers' economic analysis pointed higher during February. This change is significant compared to the last half of 1999 when no fewer than six arrows pointed up each month. High cattle on feed numbers and heavy feedlot placements are negative. And movement of boxed beef declined despite lower retail prices, indicating softer beef demand. Pork and poultry remain competitively priced causing the third down arrow. Feeding performance was one of the bright spots last month but feed costs continue to inch their way up. The industry is going to have to work through heavy supplies in the short term to maintain profitability worth smiling about.