Chicago | Reuters—Chicago Mercantile Exchange cattle futures took a dive on Wednesday on concerns that U.S. government tests of ground beef for the bird flu virus will harm consumer demand.
The U.S. Department of Agriculture has confirmed H5N1 virus infections in 36 dairy herds in nine states since the first-ever detection in late March. Older dairy cows are often processed into ground beef.
USDA told reporters it does not yet have results for tests on ground beef samples it collected from retail stores in states with infected cows, but officials have said they are confident that meat is safe.
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Commodity funds took money off the table amid concerns a positive test on ground beef would reduce consumer demand, said Austin Schroeder, analyst for Brugler Marketing & Management.
“It is as if the fear is that the entire country will stop eating anything except crickets and grasshoppers,” said Dan Norcini, an independent livestock trader. “Even the hogs cannot escape.”
CME June live cattle futures LCM24 fell 1.125 cents to close at 173.85 cents per pound and touched the lowest price since April 15 at 172.700 cents. August feeder cattle FCQ24 sank 3.75 cents to close at 251.75 cents and hit the lowest level since April 16 at 250.275 cents.
CME June lean hog futures LHM24 slid 2.05 cents to 100.425 cents per pound and reached the lowest price since April 1 at 100.325 cents.
Boxed beef prices also declined. USDA reported the choice boxed beef cutout at $293.54 per cwt, down 83 cents from a day earlier, and the select cutout at $288.07 per cwt, down $1.88.
“End users are afraid to secure inventory, fearing that prices could drop lower,” Norcini said.
Traders are looking ahead to the Memorial Day holiday at the end of May, as beef demand generally improves at the start of the summer grilling season.
“You’re coming into time when demand should be ticking higher, and your boxed beef is slipping,” Schroeder said.
