Hog and cattle futures prices rose sharply Tuesday on the Chicago Mercantile Exchange as the market reacted to fears the cold gripping the Midwest and the Plains states will adversely affect livestock.
The markets fear a lingering Arctic blast will cause cattle and hogs to use most of their energy staying warm instead of growing, resulting in smaller animals going to market.
The cattle and hog markets rose on fears the weekend's heavy snowfall and the frigid temperatures that followed represented a change in the weather pattern, analysts said. That perception was reinforced by forecasts of more snow for the coming weekend, followed by another blast of frigid air.
Until last week, mild temperatures dominated in the nation's major cattle and hog producing regions, allowing livestock to grow, according to analyst Charles Levitt of Alaron Trading Corp. The weekend's storm as first was viewed as a minor hitch in the movement of cattle and hogs to market.
But the forecasts for more snow and cold has made the market jittery. Long periods of cold will mean the animals will stop gaining weight because the nourishment from feed primarily will be used to keep their bodies warm and healthy, according to Levitt.
“That changes the production scenario,” he said. “The market had gotten used to large tonnage coming into the pipeline (for processing).”
February live cattle were 1.05 cents higher at 60.67 cents a pound; January feeder cattle were 1.50 cents higher at 70.17 cents a pound; lean hogs were 2 cents higher at 32.72 cents a pound; February pork bellies were 1.28 cents higher at 44.05 cents a pound.
Meat Industry Insights News Service
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Northport, NY 11768
Phone: 631-757-4010
Fax: 631-757-4060
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