Cattle futures declined to the lowest closing price in almost three months on speculation that higher costs for U.S. beef will erode consumer demand. Hogs also dropped.
Wholesale beef at midday rose 0.1 percent to $1.8357 a pound, a one-week high, U.S. Department of Agriculture data show. All fresh retail-beef prices may average $4.85 a pound this year, up 4 percent from 2012, according to CattleFax, a Centennial, Colorado-based research company.
“The cattle market has had a problem,” Mark Schultz, the chief analyst at Northstar Commodity Investment Co. in Minneapolis, said in a telephone interview. “We just don’t have demand” for costlier beef, he said.
Cattle futures for April delivery fell 0.4 percent to close at $1.294 a pound at 1 p.m. on the Chicago Mercantile Exchange, the lowest settlement since Nov. 15. The price has dropped 2.2 percent this year.
Meatpackers processed 353,000 head of cattle in the first three days of this week, down 1.9 percent from a year earlier, USDA figures show. Losses are probably $60 to $75 a head, Schultz said.
Feeder-cattle futures for March settlement dropped 1.3 percent to $1.4135 a pound, the ninth straight decline.
Hog futures for April settlement fell 0.2 percent to 85.8 cents a pound, the lowest closing price since Jan. 10. The price has dropped 2.5 percent in the past 12 months.