Chicago Mercantile Exchange (CME) live and feeder cattle futures slipped on Monday as boxed beef prices retreated and consumer demand fell, Reuters reported, citing traders.
Wholesale boxed beef prices have slid as industry players closely monitor consumer spending habits amid evidence that inflation-hit Americans are reducing their spending on pricier cuts of beef such as steak, which could be weighing on cattle futures.
Choice boxed beef prices slid by 35 cents to $304.57 per hundredweight and select cuts of beef fell by $2.03 to $292.14 per hundredweight, according to US Department of Agriculture (USDA) data published on Monday afternoon.
CME October live cattle futures ended down 0.425 cent at 177.225 cents per pound.
October feeder cattle ended down 0.125 cent at 239 cents per pound.
"My theory is that the US consumer has been so beat up by inflation, especially the middle to lower income consumer, that they're actively trading down, and that's a major problem for the cattle market," Dennis Smith, broker at Archer Financial Services, said.
Consumers often pass over beef for items like sausage, which is typically made from pork, when times are tight, Smith said.
Next Friday, traders will review US Department of Agriculture data showing the number of cattle in feedlots at the start of the month. As of Aug. 1, there were 11.1 million cattle on feed, up 0.3% from a year ago, the USDA said.
Expectations for a seasonal increase in the US pig slaughter pace and heavier hogs hitting the market have weighed on hog futures.
October hog futures settled up 1.475 cents at 79.925 cents per pound.
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