Livestock prices fall to new low on declining US beef sales
Cattle futures fell to the lowest in more than two years due to declining sales and demands for beef.
Dennis Smith, a senior account executive at Archer Financial Services Inc. said that wholesale beef prices are the lowest in a month, and slaughterhouses have processed 7.3 percent less cattle so far this week than in the same week last year, government data show. The slowdown may increase meat supplies as cattle spend more time getting fat on corn in feedlots, said
Smith remarked that it sounds like packers are cutting back on slaughter. This tends to make the average animal harder to market. And it indicates an eroding demand base for the animals, so packers are very unlikely to pay well.
Cattle futures for February delivery sank 1 cent, or 1.2 percent, to 83.075 cents a pound on the Chicago Mercantile Exchange. Earlier, the price touched 82.45 cents, the lowest for a most active contract since July 25, 2006. Futures have fallen by 14 percent this year and are down 24 percent from a record US$1.09575 on July 11.
Feeder-cattle futures for January delivery fell 0.25 cent, or 0.3 percent, to 88.1 cents a pound in Chicago. The most active contract is down 18 percent this year.
Wholesale choice beef dropped 2.3 cents, or 1.5 percent, to US$1.4645 a pound at midday today, the lowest price since November 4, according to the USDA. That marked the 9th decline in 10 sessions.
Meatpackers processed 483,000 cattle in the first four days of this week, down from 521,000 in the same period last year, USDA figures show. According to USDA estimates, about 31.2 million cattle had been slaughtered this year up to November 29, a gain of 0.1 percent from the same time last year.