Cattle futures extended a surge to a record and wholesale beef jumped to a 13-month high after a weekend blizzard hammered the Midwest, and a Kansas livestock group estimated the snowstorm may have killed thousands of animals, signaling tightening meat supplies.
More than half of U.S. feedlots are located in the region hit by the massive storm that dumped more than 12 inches (30 centimeters) of snow, blanketing an area from the Texas Panhandle to Nebraska, said Lee Reeve, principal at Reeve Cattle Co. in Garden City, Kansas, and president-elect of the Kansas Livestock Association. Losses were the highest among younger animals and a feedlot with 80,000 head of cattle north of Garden City lost more than 1,000 animals, he said in a telephone interview.
“The storm came on so fast, and it was the heaviest snow I’ve ever seen,” said Reeve, who lost about 40 animals from his 43,000-head operation.
Cash cattle prices had seen big gains even before the storm, surging 40 percent since the middle of October as domestic and global beef demand rose. President Donald Trump declared success last month in gaining greater access to China for U.S. beefs suppliers following meetings with President Xi Jinping, and Brazil’s beef exports may trail previous expectations after a probe into tainted meat last month led to temporary import bans by several countries.
On the Chicago Mercantile Exchange, cattle futures for June delivery rose 2.4 percent to close at $1.2705 a pound after climbing by the limit of 3 cents, the highest ever for the contract that debuted in February 2016. Aggregate trading more than doubled compared with the 100-day average for this time, according to data compiled by Bloomberg. The price jumped 12 percent in April.
Feeder-cattle futures for August settlement rose 1.2 percent to close at $1.556 a pound after jumping by the limit of 4.5 cents to a contract record of $1.5825.
At midday, wholesale beef rose 1.1 percent to $2.2877 a pound, the highest since March 21, 2016, U.S. Department of Agriculture data showed. The price has climbed 25 percent since mid-October.
Many cattle strayed and some died in the western third of Kansas, where as much as 14 inches of snow fell and winds gusted up to 60 miles per hour, according to the state’s livestock group. It didn’t provide exact figures. Road closures and power outages hampered efforts to keep cattle fed and confined, and some owners are still working to locate stray animals.
Kansas had the third most cattle on feed as of April 1, USDA data showed. Texas and Nebraska tied for first.
Heavier cattle lost as much as 40 pounds (18 kilograms), and animals are gaining weight again as the snow melts, Reeve said. Warm, dry weather forecast into next week will prevent feed yards from becoming muddy, halting the potential for more weight loss, he said.
Damage to grain from the weekend storm is still being assessed and early estimates suggest wheat losses may exceed 50 million bushels after snow and high winds slammed into four U.S. states, including Kansas, the top grower.
On the Chicago Board of Trade, hard red winter wheat futures for July delivery rose 0.4 percent to close at $4.6775 a bushel after earlier touching the highest intraday price for the contract since March 10. On Monday, the price surged a record 6.5 percent.