CME cattle futures drop as fire closes JBS USA beef plant
Tom Polansek, Reuters
via Financial Post (Canada) - Sep 13, 2021
CHICAGO — Chicago Mercantile Exchange cattle futures fell to their lowest prices since June on Monday on concerns that U.S. ranchers could temporarily lose a place to deliver their livestock for slaughter after a fire damaged a JBS USA beef plant.
JBS, owned by Brazilian firm JBS SA, halted production at the plant in Grand Island, Nebraska, which slaughters about 5% of U.S. cattle. The company later said it expects to resume operations on Tuesday.
Uncertainty about when the plant will reopen rattled cattle futures because the industry does not have extra capacity to process livestock at other plants, analysts said. That means cattle could back up in feedlots and on ranches if a major plant closes for an extended period of time.
“When you lose that packing capacity, there’s going to be more cattle than capacity to go around,” said Matt Wiegand, a risk management consultant and commodity broker at FuturesOne in Nebraska...