090119 Cattle Price Falls on Sign of Lower U.S. Beef DemandJanuary 12, 2009
(Bloomberg) -- Cattle futures fell to the lowest in a week on signs of reduced U.S. beef demand as the economy sheds jobs and consumers have less disposable income. Hog prices also declined.
Wholesale beef prices tumbled the most in almost three weeks yesterday to $1.4349 a pound, U.S. Department of Agriculture data show. The number of Americans collecting unemployment benefits surged to a 26-year high last week, after a year of recession, the Labor Department said today.
"Beef demand continues to slip," said Brian Hoops, a senior market analyst at Midwest Market Solutions in Yankton, South Dakota. Processors "are only showing up as buyers on price weakness, when we get into that $1.40 area," he said. "They have to purchase at those levels to move beef, with the poor economy the way it is."
Cattle futures for February delivery sank 0.325 cent, or 0.4 percent, to 85.45 cents a pound at 9:39 a.m. on the Chicago Mercantile Exchange. Futures earlier touched 85.375 cents, the lowest for a most-active contract since Dec. 31. Yesterday, cattle plunged 3.1 percent, the biggest drop since Oct. 10.
Feeder-cattle futures for March delivery rose 0.225 cent, or 0.2 percent, to 93.5 cents a pound in Chicago.
Wholesale beef declined 0.9 percent yesterday, the biggest drop since Dec. 18, the USDA said.
Expectations for lower cash-market cattle prices also may have pushed futures down, Hoops said.
"The big crash in the futures market yesterday probably put feedlots on the defensive, when they have more cattle to sell," he said.
In another livestock market, hog futures for February settlement fell 0.575 cent, or 0.9 percent, to 62.975 cents a pound in Chicago. The price declined for the third time in four days.
Wholesale pork prices slipped 1.13 cents, or 1.9 percent, to 57.03 cents a pound yesterday, according to USDA data. The price still is up 3.1 percent since the beginning of this year.