Chicago | Reuters — U.S. livestock futures slumped again on Thursday, volatility roiling the market as it faced resistance over surging stocks and growing concerns that meat packers will close plants in the COVID-19 coronavirus pandemic.
Lean hog future prices slipped for a second session on concerns about the domestic glut of hog supplies and mounting worries about processors being shuttered — even temporarily.
That, in turn, is increasing concerns about packers’ ability to process livestock and poultry in a timely manner.
Smithfield Foods, the world’s biggest pork processor, said Thursday it is temporarily closing a plant at Sioux Falls, S.D., because of the new coronavirus, the latest disruption to the U.S. food supply chain from the outbreak.
“The market keeps trying to carve out a bottom, and we don’t seem to be there yet,” said Ted Seifried, chief market strategist for Zaner Ag Hedge.
Cattle future prices also slid on Thursday, as traders said that meat processing is starting to slow, causing back-ups in the meat supply chain which has already been struggling with stockpiles due to the shuttering of the global food service sector — a significant buyer of meat.
That, in turn, is causing livestock producers economic woe, as cow-calf operators and feedlot owners are still bearing the cost of feeding their animals.
Chicago Mercantile Exchange (CME) most actively traded live cattle futures ended the day down 2.3 cents at 84.375 cents/lb. (all figures US$). CME May feeder cattle futures settled down 0.425-cent at 118.95 cents/lb., while August feeder cattle futures up 1.325 cents at 128.875 cents/lb.
CME most actively traded lean hog futures fell 2.775 cents, settling at 48.675 cents/lb.
U.S. markets will be closed Friday in observance of the Good Friday holiday.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago.