Cattle futures fell to an 11-week low on signs that U.S. demand for beef is weakening. Hogs also dropped.
Wholesale-beef prices have plunged 7.3 percent in March to $1.8434 a pound, heading for the biggest monthly slide since October 2008, U.S. Department of Agriculture data show. The market is “struggling with demand,” since prices on Feb. 29 reached the highest since at least January 2004, said Lane Broadbent, a KIS Futures Inc. vice president in Oklahoma City.
“The sticker shock is when these people are going to the store, and they’re going to the meat counter, and their steak prices are so high that they’re cooking out chicken or pork,” Broadbent said in a telephone interview.
Cattle futures for June delivery slumped 1.2 percent to close at $1.205 a pound at 1 p.m. on the Chicago Mercantile Exchange, after reaching $1.20025, the lowest for a most-active contract since Jan. 10. The commodity is down 0.8 percent this year.
Beef Products Inc., which uses beef trimmings to make ammonia-treated meat referred to in the industry as lean, finely textured beef, has temporarily suspended operations at three plants because of consumer concerns about the product, which is being called “pink slime” by food activists. Eldon Roth, the company’s chief executive officer, said in a statement that the product is “100 percent wholesome, safe and nutritious.” The USDA also reaffirmed the safety of the beef product this month.
The “pink slime connotation” is hurting the market and may slow beef demand, Broadbent said.
Hog futures for June settlement declined 1.7 percent to settle at 92.175 cents a pound on the CME. The price has gained 9.3 percent this year.
Feeder-cattle futures for May settlement dropped 0.9 percent to $1.537 a pound in Chicago.