Drought has led to record high cattle prices, swine disease to highest hog prices since 2011

Years of drought that depleted livestock supplies in the Midwest have led to record high prices for cattle, and a swine virus is leading to the highest prices for hogs since August 2011, Kelsey Gee reports for The Wall Street Journal. The result is higher wholesale prices, which is expected to raise the cost for consumers. (Getty Images photo)

The drought, which forced ranchers to cull herds, combined with a drop in prices for animal feed, "are prompting ranchers to retain more female cattle to breed animals and rebuild their herds, which in the near term cuts the number headed for slaughter," Gee writes. This has led cattle futures to rise 10 percent this year, and 0.9 percent in February to $1.5005 a pound at the Chicago Mercantile Exchange. "Meatpackers this week paid a record $1.52 a pound for cattle in the cash markets across Nebraska and other northern Great Plains states, with sales four to nine cents a pound higher than last week's trade."

Porcine epidemic diarrhea virus, which has killed millions of piglets since last spring, but doesn't appear to be a safety concern for humans, has led hog farmers to sell fewer hogs, leading to higher prices, Gee writes. "April hog futures at the CME rose 2.8 percent to $1.0385 a pound." (Read more)