CHICAGO, Ill. (Reuters) – U.S. live cattle futures fell 1.6 percent Nov. 6 amid fears that beef consumption in the United States would be hurt by the rise in the country’s unemployment rate to the highest in 26.5 years.
Demand for beef, which is typically priced higher than pork and chicken at the store, usually suffers when consumers are forced to tighten their belts in tough economic times.
“There are more people on food stamps and it’s just not going to be good for beef consumption versus pork and poultry,” said Dennis Smith, a broker with Archer Financial.
“Cash markets (beef and live cattle) are peaking out.”
The U.S. labour department reported that the unemployment rate rose to 10.2 percent, the highest level since April 1983.
“Ten percent of the people out there are not eating beef,” one cattle futures trader said.
There was market talk that prices in the cash cattle and wholesale markets were close to their peaks, after having gained significantly.
