Live cattle rise as US snowstorm disrupts beef production

Lean hog futures rise
calendar icon 10 January 2024
clock icon 2 minute read

Live cattle futures rose on Tuesday and feeder cattle ended mixed at the Chicago Mercantile Exchange (CME) as a severe winter storm disrupted US beef production, reported Reuters.

Tyson Foods and Cargill suspended operations at beef processing plants in Kansas due to the extreme weather, a day after blizzard-like conditions left meatpacking workers stranded in their vehicles on highways.

Bitter cold tends to slow cattle weight gains, while hazardous conditions disrupt movement of livestock to market.

CME February live cattle futures closed up 0.825 cent at 170.775 cents per pound after earlier setting a one-week low. March feeder cattle slipped 0.200 cent to finish at 224.875 cents per pound.

"It's been a disappointing trade to start the week given the horrendous weather that has hit mostly the entire cattle feeding regions in the country," said Ross Baldwin, hedge strategist for AgMarket.Net.

Nationwide, meatpackers slaughtered an estimated 94,000 cattle on Tuesday, down 25% from a week earlier, the US Department of Agriculture said.

Producers were fortunate to ship cattle to packers on Sunday and Monday before the winter storm hit, but will face frigid temperatures heading into next week, Baldwin said.

"I would expect we see a large Saturday slaughter so the packers can make up some ground, but this will give the packers a cushion for a few days on cash trade," he said.

Meatpackers were losing an estimated $143.60 per head of cattle they slaughtered on Tuesday and had estimated profits of $71.75 per hog, said.

CME February lean hog futures finished up 1.275 cents at 71.875 cents per pound and hit the highest price since Nov. 21.

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