Commodities : Hog Futures Drop Again

For the second day in a row, hog futures prices plummeted the limit allowed for daily trading at the Chicago Mercantile Exchange on concerns that labor disputes at several Midwest packing plants will backlog supplies.

Strikes have hit FDL Foods plants in Dubuque, Iowa and Rochelle, Ill.; and Swift Independent Packing’s Marshalltown, Iowa plant.

Meantime, workers at Fischer Packing’s Louisville, Ky. plant voted Wednesday to reject a contract offer; their contract expires Monday. And a vote on a negotiated contract is expected Monday at Thorn Apple Valley’s Detroit hog slaughtering plant.

The strikes and fear of additional walkouts sparked a flurry of selling in the pork-belly and hog pits as traders were concerned with the threat of a supply backlog and subsequent weakening in demand, said Chuck Levitt, a Chicago analyst with Shearson Lehman Bros.

Pork-belly prices for nearby contract months fell the daily 2 cents-a-pound limit allowed at the Merc, but closed slightly above that, while October and December hogs closed down the daily 1.50 cents-a-pound limit.