Food safety news shakes cattle futures
LINCOLN, Neb. (AP) _ A fluctuating cattle futures market that dipped to an 11-week low this week and then rebounded with gains is not unexpected, market analysts say.
Washington hearings on food safety and three E. coli contamination scares linked to ground beef in recent weeks have led to some uncertainty in the market, said Chuck Lambert, chief economist with the National Cattlemen’s Beef Association.
``The futures tends to be the market that has the most immediate reaction to both negative and positive news so that’s probably contributed some,″ he said.
More than the E. coli incidents, the weakened market is due to a plentiful cattle supply, said Jeff Stolle, vice president of marketing for the Nebraska Cattlemen’s Association.
``It would be, in my estimation, dead wrong to blame it all on E. coli,″ Stolle said. ``Most of the reaction in the futures market is that we anticipate a rather large supply of fed cattle between now and the end of the year.″
Cattle producers are becoming frustrated with the market because they had hoped to make more money than they are on cattle they purchased earlier this year, Stolle said.
On Tuesday, December cattle fell 0.45 cent to 66.225 cents a pound. November feeder cattle fell as much as 1.125 cents to 76.6 cents a pound on the Chicago Mercantile Exchange.
The market rebounded Wednesday, with December cattle gaining 0.17 cent to 66.4 cents a pound. November feeder cattle were up 0.15 cent to 76.75 cents a pound early in the day and later leveled off at 76.6.
The cash market has remained relatively constant in recent weeks. In Nebraska, slaughtered cattle were selling for $105 per 100 pounds two weeks ago and last week. This week the market softened to $104 per 100 pounds, Stolle said.
``A dollar change in three weeks is very little change whatsoever,″ he said.
In Kansas and Texas, the price paid for live cattle also has remained constant the past three weeks, dropping only $1, Stolle said.
Considering all the variables this time of year, it is difficult to sort out what is causing the highs and lows, Lambert said.
``At this stage it’s probably difficult to pin it on any one issue,″ he said.
The news for the beef industry has been nothing but bad since late August when the Hudson Foods Inc. plant in Columbus, Neb., shut down after recalling 25 million pounds of ground beef suspected of being tainted with the E. coli bacteria. A U.S. Agriculture Department investigation is under way and a federal grand jury in Omaha is investigating whether there was an attempt to cover up the extent of the possible contamination.
Last week, South Korean officials said they would not accept 18 tons of beef imported from IBP Inc. of Dakota City, Neb., after samples showed the presence of E. coli.
And on Friday, BeefAmerica recalled 443,656 pounds of ground beef from its Norfolk plant after meat tainted with E. coli found in a Virginia grocery store was traced to the company.