Chicago Mercantile Exchange (CME) cattle futures headed up on Tuesday as workers at a processing plant went on strike, corn prices fell, and the dryness threatened herds, reported Reuters.
Workers have gone on strike at a large JBS meatpacking plant in Greeley, Colorado, which is likely to reduce US beef production at a time when consumers face record prices for hamburgers and steaks and US President Donald Trump has struggled to make good on his pledge to lower costs.
The workers have launched a two-week strike and will remain on the picket lines until JBS negotiates fairly with workers, according to the union.
Dan Basse, president of AgResource Company, said feeder cattle was also supported by low corn prices, which makes it cheaper to feed the animals.
CME April live cattle settled 1.975 cents higher at 235.225 cents per pound. April feeders finished up 4.35 cents at 359.800 cents per pound.
And said Basse, dry weather and fires in Nebraska could displace many cows and spur ranchers to send some of their cattle to slaughter, even as they attempt to rebuild a herd they have been slashing.
"We could end the expansion cycle and move to a liquidation cycle if we don't get some rain across the plains," said Basse.
Beef packer margins rose to $128.90 per head on Tuesday, up from gains of $57.10 on Monday, and losses of $45.50 a week ago, according to livestock marketing advisory service HedgersEdge.
CME lean hog futures ended up 0.225 cent at 93.725 cents per pound.
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