Chicago Mercantile Exchange live cattle and hog futures rose on Wednesday, with tight supplies supporting prices after a slowdown in the pace of slaughter.
Most actively traded February lean hogs rose 0.7 cent to 82.3 cents per pound. Hog futures have risen for three days in a row, their longest streak of gains in a month.
CME February live cattle futures settled up 0.875 cent at 138.55 cents per pound. March feeder cattle futures rose 0.2 cent to end at 165.625 cents per pound.
Meat processors slaughtered an estimated 457,000 hogs on Wednesday, up 5% from a week earlier, the U.S. Department of Agriculture said. The cattle slaughter was 115,000 head, up 1,000 from a week ago.
The pace was still well below year-ago levels despite strong demand for meat. COVID-driven plant shutdowns, safety protocols spacing employees further apart and labor shortages have cut the number of animals these plants could process.
“I think most expect last week’s production to have been our weakest performance, but with ongoing labor absenteeism, few are confident in calling any kind of a timeline on a return to normalcy,” brokerage StoneX said in a note to clients.
Profit margins for beef processors rose to $426 per head of cattle on Wednesday from $411 on Tuesday and $323.95 a week ago, said HedgersEdge.com. Pork processors’ margins fell to $26.85 from $45.75 per head.
