Indicators of beef's economy recorded solid improvement last month. The first two months of 1999 have been favorable for producers with cattle prices trending higher and feed costs trending lower. Stocker and feeder cattle have found strong demand as the grazing season nears, but fed cattle also are pushing higher.

Analysts continue to call for declining supplies of slaughter cattle and improving prices in the coming weeks and months. Of beef's eight economic indicators measured in Drovers analysis, five saw arrows pointing higher during February, two sideways and just one lower. Continued heavy slaughter weights is a concern, as are continued large supplies of poultry and pork. Profit margins for packers and processors continue to erode, thus the down arrow.