Cattle declined to the lowest price in almost three months on speculation that U.S. meat supplies are outpacing demand as animal weights rise. Hogs also dropped.
Beef production in 2013 will be 1.2 higher than forecast a month earlier as weights climbed, the U.S. Department of Agriculture said Feb. 8. Steers averaged 1,424 pounds (646 kilograms) in the first four days of last week, up 5.7 percent from a week earlier, USDA data show. Cattle prices dropped 1.6 percent in Chicago last week.
“The number one problem is the industry continues to overfeed cattle,” Dennis Smith, an analyst at Archer Financial Services in Chicago, said in a telephone interview. Heavy animals are “going to take the edge off the rally,” he said.
Cattle futures for April delivery fell 0.4 percent to $1.29625 a pound at 10 a.m. on the Chicago Mercantile Exchange, after reaching $1.2895, the lowest for the most-active contract since Nov. 15.
Feeder-cattle futures for March settlement slumped 0.5 percent to $1.4425 a pound in Chicago, heading for the seventh straight decline. That would be the longest slide since Jan. 17.
Hog futures for April settlement dropped 0.2 percent to 85.975 cents a pound. Prices were up 0.5 percent this year through Feb. 8.
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