By Joanna Newman
THE US cattle market has staged a sharp rebound since the start of the month, after drifting lower in the quiet period between Christmas and New Year.
The cattle industry has benefited from a recovery in pig prices in early January, which has helped to support livestock and meat values across the board.
Cold weather is also driving cattle prices higher. With heavy snow and wintry conditions finally hitting key regions of the USA, this is expected to raise the production costs of cattle, slow down the rate of weight gain and threaten higher death losses.
The Chicago February live cattle futures contract, representing animals ready for slaughter, settled yesterday (6 January) at 62.17¢/lb (82.5p/kg), up from 59.6¢ at the start of the week and its highest close since early December.
The January store cattle contract, for lighter animals entering the feedlots, has followed a similar pattern.
The contract closed yesterday at 71.67¢/lb, a level not seen since the start of December.
Meanwhile the slaughter houses have raised their bids for live animals, concerned that further snows could hamper deliveries.
Packers are bidding 60¢/lb, up from 58¢ at the start of the week, while producers are countering with offers at 62¢/lb.
With snowstorms ahead and pig prices rallying, many analysts are predicting further gains for cattle.