U.S. cattle futures slumped April 20 after an animal-welfare group released a grisly video depicting dairy calves on a Texas ranch being killed with a hammer and pickaxe.
The owner of the E6 Cattle LLC ranch described the incident as a one-time event involving four new employees who had since been fired, and said training and other action had been taken to prevent any recurrence.
Some traders in Chicago said they believed investors had sold cattle futures due to fears that the video might prompt consumers to avoid beef. Others said the impact on futures prices from such selling would have been exaggerated due to light volume ahead of a long, holiday weekend.
The release of the video followed an undercover investigation by Mercy for Animals, Nathan Runkle, executive director of the group, told Reuters. The group took the video and documents to the local district attorney’s office.
Runkle and Kirt Espenson, owner of the ranch, located in the town of Hart, said no charges had been filed against it.
“We have been in full co-operation with the district attorney’s office,” Espenson said.
“I take full responsibility for what happened,” Espenson told Reuters. “The employees in the video have all been fired.”
U.S. cattle futures fell sharply after the group aired the video at news conferences in Texas and on its website as investors worried its contents could turn consumers away from beef in the short term.
To see the website, click on: (http://www.mercyfor animals.org/calves/).
Traders said the video appeared to spook investors relatively new to cattle futures, such as hedge funds that have flocked to livestock markets over the past year.
“You’re not going to buy … when that comes out,” one Chicago Mercantile Exchange cattle trader said.
Many analysts doubted the video would have lasting impact, noting that previous undercover investigations showing similar abuse to animals had little effect on meat consumption.