Livestock and meat futures prices slumped badly Friday with the prospect of a lot more meat coming on the market toward the end of summer.
The signal for the oversupply came from the Agriculture Department's cattle-on-feed report, issued late Thursday, which showed a large number of animals placed on feed during April.
The feedlot operators "did it to themselves," said Chuck Levitt, an analyst with Shearson Lehman Bros.
When the Agriculture Department in late March announced details of the whole-herd dairy buyout program, cash cattle prices got relatively cheap, Levitt said. In addition, there were prospects for cheaper feed prices.
"The cattle feeders just couldn't take a pass, they just had to energize themselves into putting a significant number of animals on feed," he said.
The Agriculture Department report showed 10% more animals put on feed in April than during the comparable period a year ago.
Pork futures also were down sharply, pressured by the knowledge that when the fed cattle come to market, their larger numbers are going to provide sharp competition for hog products.