Future lean pork prices slipped for a second session due to concerns about the domestic glut of pork supplies and growing concerns about the shutdown of processors – even temporarily.
This, in turn, increases concerns about the ability of packers to process livestock and poultry in a timely manner.
Smithfield Foods Inc., the world’s largest pork processor, said Thursday it was temporarily closing a plant in Sioux Falls, South Dakota due to the new coronavirus, the latest disruption in the US food supply chain since the epidemic.
“The market continues to try to carve out a bottom, and we don’t seem to be there yet,” said Ted Seifried, chief market strategist for Zaner Ag Hedge.
Future cattle prices also fell on Thursday, as traders said meat processing was starting to slow, resulting in safeguards in the meat supply chain which was already struggling with stocks due to the closure of the global food service sector – a major buyer of Meat.
This, in turn, causes economic problems for breeders, as calf breeders and feedlot owners still bear the cost of feeding their animals.
The Chicago Mercantile Exchange (CME), the most actively traded live cattle futures, ended the day down 2,300 cents to 84.375 cents a pound. CME feeder cattle futures fell 0.425 cents to 118.950 cents a pound, while feeder cattle futures rose 1.325 cents to 128.875 cents a pound in August.
CME’s most actively traded lean pork futures fell 2.775 cents to 48.675 cents per pound.
The American markets will be closed on Friday for the Good Friday holidays.