The USDA’s monthly Cold Storage report Monday was not bullish for beef and cattle markets. The amount of on-ice beef was rising at a faster-than-normal pace while pork and poultry stocks declined at a faster-than-normal pace.
Monthly red meat and poultry supplies in cold storage are following seasonal trends, but on a much more exaggerated scale, leaving total red meat supplies at an October record, the USDA said Monday.
The Cold Storage report as of Oct. 31 showed total red meat supplies at 1.2 billion pounds, down 40.3 million, or 3.36%, from 1.2 million in September but up 204.9 million, or 21.4%, from 956.5 million a year ago.
Total poultry in cold storage declined 173.1 million pounds, or 16.5%, to 1.2 billion from September’s 1.1 billion. Compared with a year ago, total poultry stocks were up 88.9 million, or 7.83%, from 1.1 billion.
BEEF STOCKS RECORD HIGH
Beef in cold storage amounted to 511.6 million pounds, up 130.6 million, or 34.3%, from 380.9 million in October. It was up 85.6 million, or 20.1%, from 426.0 million a year ago.
Frozen beef supplies usually rise through late summer and fall as production increases and consumption fades. However, last year the tendency was more pronounced.
Beginning with September of 2014, beef stocks in cold storage began to rise more sharply than the 2009-2013 average as the industry produced more cattle and more beef. A rising US dollar as the economy continued to slog out of the Great Recession contributed to slower beef exports as well.
In January of this year, beef stocks broke above the average and stayed there, following the seasonal trend downward but at a higher level. This year’s break to the upside began in August and has continued to diverge from the average, generally following the steep trend of 2014, although, again, it was at a much higher level.
If the trend toward more frozen beef supplies continues in November when a greater amount of poultry is consumed, frozen beef stocks could approach 640 million pounds.
PORK STOCKS DROP, REMAIN HIGH
Pork stocks in cold storage fell 69.6 million pounds, or 13.1%, in October to 602.7 million from 533.1 million in September, nearly the low point in the year. However, stocks were up 71.6 million, or 13.5%, from 531.0 million a year ago.
In general, monthly frozen pork supplies this year followed the trends of last year and the average, only on a more exaggerated and higher level.
But if stocks decline at a normal rate in November with the increased holiday ham sales, a November stocks level of 582 million pounds might be expected. This would be 18.1% above last year’s November rate of 492.8 million and 14.0% above November 2014’s 510.2 million.
CASH FED CATTLE MARKETS THIN
Cash cattle trading last week appeared to be thin and concentrated mainly in Nebraska. The USDA 5-market average price was $123 per cwt, down $4 from $127.04 a week earlier. On a dressed basis, prices were down about $5 to $194.50 from $199.29 a week earlier.
Wholesale beef prices Monday were mixed, with the USDA choice cutout at $202.79 per cwt, down $0.35 on the day, and its select cutout at $191.05, up $0.10. The choice/select spread Monday narrowed to $11.74 from $12.19 on Friday, and there were 103 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Friday was $171.51 per cwt, down $2.88. This compares with the Jan settlement Monday of $165.40, up $1.75.