US hog and cattle futures drop as supply may surpass pork demand

US hog and cattle futures fell for a third day this week on speculation that meatpackers will cut back on slaughtering as production is outpacing demand for pork and beef.

Meatpackers processed 1.31 million hogs in the first three days of this week, up 4.1 percent from the previous week and 1.8 percent from a year earlier, according to USDA estimates.

According to USDA data, hog futures for February settlement fell US$0.13 or 2 percent, to US$0.62 per pound, while wholesale pork prices slipped US$0.11 or 1.9 percent to US$0.57 per pound, the biggest drop since December 29.

Cattle futures for February delivery sank US$0.17 or 2 percent, to US$0.84 per pound in Chicago, while wholesale beef prices tumbled the most in almost three weeks yesterday to US$1.4349 per pound.

Jason Golly, vice president of risk management marketing at Lynch Livestock Inc., said products are piling up as meatpackers are having problems selling the meat.

Golly said hog futures may gain later this year if animal supplies tighten.