Tight provide drives US beef costs
30 April 2025
2 minute learn
Chicago Mercantile Alternate (CME) dwell and feeder cattle futures surged to recent contract highs on Tuesday, as money costs remained elevated and beef provides restricted going into the US grilling season, Reuters reported, citing market analysts.
In the meantime, CME lean hog contracts turned decrease for a second consecutive session on a flurry of unfold buying and selling, the place market individuals and a few funds opted to dump hogs in favour of cattle, stated Don Roose, president of Iowa-based US Commodities.
“Proper now, the futures costs are being restricted by the money market, which remains to be effectively under the futures costs we’re seeing for summer season hogs,” Roose stated. “Till these money costs begin to go up, there’s solely a lot the futures market will and might do.”
However the money cattle market has been rallying – with provides anticipating to proceed to rise this week and attainable into subsequent, Roose stated.
US producers have been capable of command steep costs after slashing their herds on account of a drought that decreased pasture lands obtainable for grazing. The tight stock forces beef processors to compete and pay extra to purchase cattle to slaughter for steaks and hamburger meat.
Within the wholesale beef market, selection cuts of boxed beef rose $3.42 to $346.19 per hundredweight (cwt) on Tuesday morning, whereas choose cuts eased down 31 cents to $324.81 per cwt, in line with knowledge from the US Division of Agriculture.
However beef processors have been dropping an estimated $100.05 per head of cattle they slaughtered on Tuesday, advertising advisory service HedgersEdge.com stated.
“The air is getting fairly skinny up there, so it will be a query of who’s going to maintain shopping for beef at these costs,” Roose stated.
CME June dwell cattle futures settled up 0.600-cent at 210.200 cents per pound. August feeder cattle futures closed 1.95 cents greater at 296.900 cents per pound.
In CME’s lean hog market, June futures slipped 1.55 cents to 99.45 cents per pound.
