Livestock Futures Prices Fall

Livestock and meat prices fell sharply Tuesday on the Chicago Mercantile Exchange as the hog slaughter continued to outweigh demand for pork.

Frozen pork bellies fell by 2 cents a pound and live hogs by 1.5 cents a pound, their daily limits, as pressure from the cash markets weighed heavily on futures. Both fell to life-of-contract lows in most deliver months.

Live hogs recovered before the close of trading but still finished with sizable losses.

Pressure in the pork complex also spilled into the cattle markets, said Chuck Levitt, a livestock analyst in Chicago with Shearson Lehman Bros.

In the hogs, the slaughter in the first six weeks of the quarter has been running about 6% ahead of year-earlier levels, while the June report on hog and pig inventories from the Agriculture Department had led analysts to expect an increase of about 1%, Levitt said.

Tom Morgan, a livestock analyst in Chicago with Heinold Commodities, noted also that contract negotiations at many meat packing plants are under way and some could close if new agreements aren’t reached.