Beef futures remain in free fall on exchange

CHICAGO -- Beef prices extended their steep decline Tuesday on the Chicago Mercantile Exchange, with key contracts falling the exchange-allowed limit for a fourth consecutive session after early buying interest fizzled.

The most-active February live cattle contract ended the trading day down 5 cents at 76.17 cents per pound despite virtually the first buying since mad cow disease emerged in a U.S. cow a week earlier.

Buyers disappeared by late morning amid talk that beef previously headed for Japan and South Korea -- which have been among the top three customers for U.S. beef -- already was being shipped back to the United States despite U.S. diplomacy to end a nearly worldwide ban.

Japan, South Korea and some 30 other nations banned imports of U.S. beef in the wake of the Dec. 23 discovery of a case in Washington state of bovine spongiform encephalopathy, or mad cow, a disease that eats holes in the brains of cattle.

Facing a tidal wave of selling interest, the Merc has temporarily raised the maximum daily limit from the previous 1.5 cents a day -- a rule it adheres to in order to discourage excess speculation. While prices have sunk 16 percent, they won't stabilize until all the sellers are accommodated. Hundreds of February sell orders reportedly remained unfilled Tuesday because of the limit.

Also Tuesday, U.S. Sen. Dick Durbin, D-Ill., who has made beef safety an issue for years, reiterated that the nation needs even stricter regulations to keep its food safe and said he will introduce legislation next month requiring several new steps.

Durbin's proposal would establish a national identification system for cattle, along with other steps.