US hog futures drop as Smithfield closes pork plant

Hog futures fell for a second straight session on speculation that demand for the animals will slow as Smithfield Foods Inc. reduces processing capacity.

Smithfield, the world's largest pork processor, was set to close a Sioux City, Iowa, plant next week that could slaughter as many as 13,000 hogs a day. Production there ended last week, according to reports. The company said in January that the plant would shut effective April 20.

Hog futures for June settlement fell 0.4 cent, or 0.5%, to 83.975 cents a pound on the CME. Hogs rose 1.2% last week, and on April 7 touched 85.9 cents, the highest price for a most-active contract since April 1997.

Hogs for immediate delivery to slaughterhouses have dropped 1.4% from 75.02 cents a pound on April 6, the highest price since August 2008, according to USDA figures. At the same time, wholesale pork gained 3.9% to 79.51 cents on April 9.

Meanwhile, cattle futures for June delivery fell 0.7 cent, or 0.7%, to 94.05 cents a pound. The price rose 1.3% last week, the second straight increase. Feeder-cattle futures for May settlement declined 0.325 cent to US$1.1505 a pound.

Wholesale choice beef climbed to US$1.6567 a pound at midday, the highest price since July 2008, according to USDA figures. Consumers may slow buying as prices rise, analysts said.

According to analysts, beef has gained as grocers stock up before warmer weather in much of the US ushers in the outdoor-grilling season and spurs demand. Beef exports also rose 24% in the four weeks through April 1 from a year earlier, USDA data show.