Cattle prices fall on demand worries
Cattle futures fell on speculation that demand will decline on record beef prices, and as a winter storm in the eastern U.S. keeps consumers from eating at restaurants.
U.S. fresh retail beef prices reached $5.036 a pound in December, the highest ever, according to the Department of Agriculture, which has curbed demand. That has been exacerbated by a winter storm that dropped more than a foot of snow in parts of the U.S.
The snow has kept people in their homes and out of restaurants, which lowers beef consumption, said Lawrence Kane, a market adviser at Stewart Peterson Group in Yates City, Ill.
"The beef business relies a fair amount on restaurants, and restaurants right now are getting slammed," Mr. Kane said. "You leave work and manage to get the car started, then you get home -- the last thing you want to do is go back out there and walk across a cold parking lot at a restaurant. It's been a mean winter for livestock producers."
February cattle futures fell 0.425 cent, or 0.3%, to $1.39225 a pound on the Chicago Mercantile Exchange. Feeder-cattle for March delivery fell 0.12 cent, or 0.07%, to $1.668 a pound on the CME.
Hog futures were mostly lower as meatpackers probably won't bid for many slaughter-ready animals as U.S. producers from Kansas to Indiana are still socked in after the winter storm. About six inches of snow fell in parts of Iowa, the biggest U.S. hog producer, according to the National Weather Service.
Movement has slowed in rural areas, and packers probably have enough animals and pork stockpiles to hold them until the snow passes and they can buy hogs for less.
"Nobody is taking hogs to town right now," Mr. Kane said. "Yesterday our local sale barn shut down because of the storm. And the packers aren't beating down the doors saying 'Give me a load of hogs.' They're content with what they have the freezers right now."
Hog futures for April delivery fell 0.67 cent, or 0.7%, to 94.32 cents a pound on the CME. Futures for February delivery dropped 0.02 cent, or 0.03%, to 86.42 cents a pound in Chicago.
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(END) Dow Jones Newswires
February 06, 2014 12:11 ET (17:11 GMT)