CHICAGO — Chicago Mercantile Exchange lean hog futures bounced back on Friday, though analysts said U.S. staffing shortages caused by COVID-19 infections continued to limit meat production.
Most actively traded February lean hogs touched a one-week high and ended 3.050 cents stronger at 80.900 cents a pound. The contract recovered after falling to a one-month low on Thursday.
Some traders said hopes for a slowdown in coronavirus cases, particularly of the contagious Omicron variant, may have helped boost prices.
The Omicron surge appears to be slowing in areas that were hit first, including Northeastern and Southern states, according to a Reuters analysis.
Slow slaughtering due to employee shortages can back up hogs and cattle on farms and in feedlots if the animals cannot be processed.
Meat processors slaughtered an estimated 438,000 hogs on Friday, down 3% from a week earlier, the U.S. Department of Agriculture said. Late last year, they were slaughtering about 480,000 hogs a day.
Processors slaughtered an estimated 113,000 cattle on Friday, compared to about 120,000 cattle daily at the end of last year, according to USDA data.
JBS USA, owned by Brazilian meatpacker JBS SA, said COVID-19 cases have increased over the past week in its workforce at a massive beef plant in Greeley, Colorado.
The plant, with about 3,525 workers, reported about 42 cases this year through Wednesday and 64 cases since October, Colorado state data show.
JBS said most of the recent cases have been mild or asymptomatic and that 80% of the facility’s workers are vaccinated.
Profit margins for beef processors like JBS increased to $369.90 per head of cattle on Friday from $344.40 on Thursday and $224.90 a week ago, said HedgersEdge.com. Pork processors’ margins also rose.
CME February live cattle futures settled up 0.975 cent at 137.975 cents per pound and touched their highest price since Jan. 3. March feeder cattle futures slipped 0.350 cent to end at 166.375 cents per pound. (Reporting by Tom Polansek in Chicago; Editing by Muralikumar Anantharaman)