Among the results of the monthly count of various meats in US commercial freezers on Aug. 31, one stands out as being particularly large. Stocks of pork bellies were down 37% from July but were up 132% from last year, but this is only part of the story from this report.
Restaurants likely will continue featuring sandwiches with bacon because it is so readily available. One restaurant chain has even gone so far as to advertise a pork belly sandwich.
The USDA’s National Agricultural Statistics Board’s monthly Cold Storage report Friday showed that total red meat supplies were up 1% from August but were down 3% from last year. Total frozen poultry supplies were down 4% from the previous month but were up 4% from a year ago.
What makes the results so significant is the large supplies of protein on ice and available to the market along with continued strong production levels. This is particularly meaningful for cattle producers is that beef is liable to suffer the greatest setback in consumption as these meats contend for consumer dollars at the retail and restaurant level.
TOTAL MEAT STOCKS ABOVE 2015
Total supplies of red meat and poultry were reported above year-ago levels even though poultry inventories were down from last month and a year ago, pressured by reduced stocks of chicken.
NASS reported that total red meat supplies amounted to 1.130 billion pounds, up 12 million, or 1.07% from a month earlier but down 40 million, or 3.4%, from 1.170 billion a year ago. Poultry supplies, at 1.315 billion pounds, was down 49 million, or 3.59%, from 1.364 billion a month ago but was up 50 million, or 3.95%, from 1.265 billion a year ago.
But what’s even more significant for prices is that stored supplies of red meat and poultry continue to run higher than the 2010-2014 average. Red meat stocks were up 193 million pounds, or 20.6%, from the five-year average of 937.4 million, and total poultry supplies were up 102 million, or 8.41%, from the five-year average of 1.213 billion.
HOLIDAY DEMAND COMING
Increased holiday demand can be expected to draw poultry supplies down in the months leading up to the Thanksgiving Day holiday. Broiler slaughter declines slightly in the last third of the year, and turkey consumption jumps.
With turkey stocks up in the latest cold storage report, it’s clear that the annual migration from commercial to retail freezers had not yet begun in August. The seasonal drawdown of turkey supplies begins in September and accelerates into November where it bottoms for the year.
There also is a seasonal blip in beef rib consumption for the holidays. But overall, there still is a lot of meat in the freezer.
CASH CATTLE MARKETS LIGHTLY TRADED
Cash cattle trading was very light last week with prices down about $4 per cwt on a live basis at $106 and at $166 to $168 dressed. Otherwise, asking prices ranged from $112 to $115 live.
The USDA’s choice cutout Monday was $0.23 per cwt higher at $187.04, while select was up $0.84 at $179.65. The choice/select spread narrowed to $7.39 from $8.00 with 114 loads of fabricated product sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Friday was $137.14 per cwt, up $1.04. This compares with the Sep settlement Monday of $136.05, down $0.77.