Jan. 3 (Bloomberg) -- Cattle futures rose to a record for the fifth straight session as supplies of beef shrink in the U.S., the world’s biggest producer. Hog prices fell.
Beef production in the three months ending March 31 will be 5.88 billion pounds (2.66 million metric tons), down 7.9 percent from the last quarter of 2013, the U.S. Department of Agriculture has projected. Output in 2014 will drop to the lowest since 1993, the agency forecast. Spot steers averaged $1.3746 a pound yesterday, up 8.8 percent from a year earlier, USDA data show.
“This is just a strong market,” Chad Henderson, an analyst at Prime Agricultural Consultants Inc. in Brookfield, Wisconsin, said in a telephone interview. “From the fourth quarter to first quarter, you’re getting a drop in live-cattle numbers.”
Cattle futures for February delivery rose 0.5 percent to settle at $1.363 a pound at 1 p.m. on the Chicago Mercantile Exchange. Earlier, the price reached a record $1.36375. In December, the commodity climbed for the seventh straight month, the longest rally since 1978.
The northern Plains and upper Midwest may have “dangerously cold temperatures” tomorrow, and temperatures may reach minus 20 degrees Fahrenheit in parts of North Dakota and Minnesota, according to the National Weather Service.
The freeze will “impact rates of gain” in livestock weight as cattle use more energy to stay warm, Lawrence Kane, a senior market adviser at Stewart-Peterson Group in Yates City, Illinois, said in a telephone interview.
Feeder-cattle futures for March settlement climbed 0.7 percent to $1.681 a pound.
Hog futures for February settlement declined 0.5 percent to 86.675 cents a pound in Chicago.
--Editors: Patrick McKiernan, Thomas Galatola