CHICAGO, Jan 7 (Reuters) – Chicago Mercantile Exchange cattle futures tumbled on Wednesday as meatpackers faced major losses slaughtering the high-priced farm animals to make steaks and hamburgers.
Cattle prices climbed to record highs last year as the U.S. herd dwindled following a persistent drought that dried up pasture lands and raised feeding costs. Futures pulled back in the autumn but have rebounded since late November as supplies remained tight.
Packers were losing an estimated $255.50 per head of cattle they processed on Wednesday, compared to $229.75 per head on Tuesday, according to livestock marketing advisory service HedgersEdge.com.
The losses fueled expectations that packers may reduce their demand and be willing to pay less for cattle, brokers said.
CME March feeder cattle futures slid 3.525 cents to close at 355.500 cents per pound, after rising on Tuesday to the highest level since October 23.
CME February live cattle futures fell 2.100 cents to 234.525 cents per pound. On Monday and Tuesday, the contract set its highest prices since October 24.
Beef prices also set records last year, though consumer demand stayed strong.
On Wednesday, the industry cheered as the administration of President Donald Trump advised Americans to eat more protein in a new slate of dietary guidelines. The guidelines recommended that adults consume 1.2 to 1.6 grams of protein per kilogram of body weight per day, up from the prior recommended daily consumption of 0.8 grams.
“The updated and simplified dietary guidelines will help more families like mine learn the facts about beef’s nutritional value,” said Kim Brackett, an Idaho rancher and vice president of the National Cattlemen’s Beef Association.
In the pork market, CME February lean hog futures closed down 0.875 cent at 84.800 cents per pound. Prices have pulled back after touching an October high on Monday.
Average hog weights in Iowa, southern Minnesota and South Dakota rose to 295.5 pounds last week from 294.2 pounds a week earlier, the USDA said.
(Reporting by Tom Polansek in Chicago; Editing by Shilpi Majumdar)
