US hog futures plummet from 13-year high; cattle decline

US hog futures fell from a 13-year high on signs that traders are making sales to lock in profit after prices surged 29% this year. Cattle also dropped.

US farmers cut hog-breeding herds to the lowest level on record in a bid to halt more than two years of losses, limiting supplies available to meat processors and triggering the rally.

Hog futures for June settlement fell 0.525 cent, or 0.6%, to 84.95 cents a pound on the CME. Earlier, the price reached 86.05 cents, the highest level for a most-active contract since April 1997.

Wholesale pork reached a 19-month high on Tuesday (April 13) of 81.25 cents a pound and is up 58% since swine flu and the recession drove prices to a six-year low in August, USDA data show. The US hog breeding herd totalled 5.76 million sows on March 1, down 3.9% from a year earlier.

Meanwhile, cattle futures for June delivery dropped 0.525 cent, or 0.6%, to 92.95 cents a pound. The price is up 11% in the past year. Feeder-cattle futures for May settlement slipped 1.4 cents to US$1.122 a pound.

Wholesale choice beef fell 0.2% at midday to US$1.6664 a pound on Tuesday after reaching the highest level since July 2008, according to the USDA. High meat costs may be cutting demand, as consumers are still price-sensitive, analysts said.

Earlier, hogs and cattle futures rose on speculation that Russia will resume imports of US chicken, leaving less poultry meat available in the US to compete with pork and beef.

Russia, once the largest importer of US chicken, essentially barred the meat as of January 1 by slashing the allowable amount of chlorine producers can use as a disinfectant.