After hitting record highs, cattle prices, along with related exchange traded notes, are experiencing some weakness on declining demand.

Over the past month, livestock ETNs have declined off their highs, with the iPath Dow Jones-UBS Livestock Subindex Total Return ETN (NYSEArca: COW) down 9.3%, UBS E-TRACS CMCI Livestock TR ETN (NYSEArca: UBC) down 7.1% andiPath Pure Beta Livestock ETN (NYSEArca: LSTK) down 6.0%.

The ETNs have a large allocation toward live cattle, along with lean hogs. Cattle makes up 55.3% of COW, 57.6% of UBC and 57.1% of LSTK.

Live cattle for August delivery dipped 3% last week to $1.5255 per pound, its lowest closing price for a front-month contract since July 18, the Wall Street Journal reports.

“Livestock markets have run up all summer long, and now traders are wondering how much of that reflected supply fundamentals and how much of it was just exuberance” as bullish bets continued to mount, Altin Kalo, an economist with food-industry advisory firm Steiner Consulting Group, said in the article.

Red-meat consumption typically dips during the hottest summer months. However, the pullback may be short-term as the market still faces significant fundamental hurdles. Specifically, the current herd size is the smallest since 1951. Additionally, while dry conditions have moderated, some ranchers are retaining breeding animals to expand herds rather than selling them for slaughter, which will further diminish supply.

Some observers also argue that cheap feed-grain will result in greater pork and poultry supply, which would help these products undercut beef at the supermarket.

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