Total US red meat supplies in cold storage on Feb. 28 were down slightly from a month earlier but were up 1% from last year, the USDA’s National Agricultural Statistics Service’s monthly Cold Storage report said Thursday.
Total poultry supplies in freezers at the end of February were up 6% from the previous month and up 14% from a year ago.
The fine print could be bullish for beef and cattle prices but somewhat bearish for pork and hog prices, a market analyst said, as the total pounds of beef in cold storage were down 8% from January and down 8% from last year.
Frozen pork stocks were up 6% from Jan.31 and up 8% from last year. Plus, stocks of pork bellies were up 6% from last month and up 188% from last year.
At the same time, total chicken stocks were up 3% from the previous month and up 15% from last year. Total pounds of turkey on ice were up 14% from last month and up 13% from a year earlier.
BEEF NUMBERS SUPPORTIVE
The actual beef numbers look supportive for beef and live cattle prices and confirm reports of strong seasonal beef demand similar to last year.
Some might consider the drawdown in cold storage supplies to be caused by reduced production, but this is not the case. The USDA said total federally inspected cattle slaughter this year through last week totaled 6.546 million head, up from 6.400 million a year ago.
Average dressed weights last week were listed at 824 pounds, up from 817 pounds a year earlier, and weekly averages have been above last year in most weeks this year. This has produced a total of 5.399 billion pounds of beef, up 2.8% from 5.253 billion a year earlier.
PORK STOCKS UP BUT BELOW AVERAGE
Meanwhile, pork stocks are up from last year, which would be bearish to prices, an analyst said, but the situation is not as dire to these markets as it could be.
The total amount of pork in cold storage rose from January’s volume, but this is seasonal and should play no role in any trader’s decisions after the report, the analyst said. The surprise would have been if stocks had gone down from January.
As it is, frozen pork inventories are up from last year but below the 2012-2016 average. If the trends keep following last year, cold storage pork stocks will decline from February through March and rebound through April.
After that, total frozen inventories will decline into July’s low where a fall rise will give way to year-end ham demand and reduce inventories into December.
What will be telling is if frozen pork stocks exceed the five-year average for any length of time.
CATTLE, BEEF RECAP
A total of 166 head cattle sold Wednesday on the Livestock Exchange Video Auction at $125.63 per cwt, down $98.63 from a week earlier.
Cash sales this week were at $124 to $126.50 per cwt on a live basis, down $1.50 to $2 from last week. Dressed-basis trading was $200 to $203, down $4 to $5.
The USDA’s choice cutout Thursday was up $0.83 per cwt at $225.21, while select was up $1.63 at $218.02. The choice/select spread narrowed to $7.19 from $7.99 with 95 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Wednesday, was $139.39 per cwt, down $1.56. This compares with Thursday’s Mar settlement of $137.52, up $0.75.