Cattle futures capped the biggest decline this week on speculation that demand for U.S. beef will slow as consumers switch to cheaper pork and chicken. Hog prices also declined.
Slaughtering plants processed 492,000 cattle in the first four days of this week, down 3.1 percent from the same period a year earlier, U.S. Department of Agriculture data show. Supermarkets may have completed most of their buying before the Independence Day holiday on July 4, the busiest day of the year for outdoor grilling, according to Dick Quiter at McFarland Commodities LLC. While wholesale beef dropped 6 percent in the past four weeks to $1.9869 a pound, pork fetched $1.0698 a pound and chicken cost $1.0575, according to government data.
“Pork is considerably cheaper, and there’s plenty of chickens around, so demand is relatively low for cattle,” Quiter, an account executive, said in a telephone interview from Chicago. “It’s going to be hard to turn this cattle market around now that Fourth of July demand has passed.”
Cattle futures for August delivery fell 0.3 percent to settle at $1.20 a pound at 1 p.m. on the Chicago Mercantile Exchange, the biggest drop since June 14.
Prices are down 9.3 percent in 2013. U.S. beef exports probably will drop 5.8 percent this year to 2.31 billion pounds, and slip 0.5 percent in 2014, the USDA estimates.
Feeder-cattle futures for August settlement declined 0.2 percent to close at $1.44425 a pound.
Hog futures for August settlement fell 0.1 percent to 98.275 cents a pound on the CME. Prices are down 15 percent this year.