Red Meat Stocks Could Weigh On Prices

The amount of red meat, especially pork, in cold storage could hang over meat and livestock markets in coming weeks or months as supplies of pork increase counter-seasonally and beef supplies remain above a year ago.

The USDA’s monthly Cold Storage report Friday showed April 30 total red meat supplies in US freezers were up 2% from March 31 and up 20% from last year.

Total pounds of beef in storage, at 476.7 million pounds, were down 1% from April’s 481.5 million but up 18% from last year’s 402.3 million.

Frozen pork supplies, however, were up 4% to a record 699.6 million pounds from the previous month’s 672.4 million and up 20% from last year’s 583.9 million.




The increase in beef stocks may seem alarming at first glance, but a look at a graph of cold storage supplies shows inventories are almost parallel with the previous five-year average and are on a seasonal downward slope.  This explains the decline in inventories from a month earlier.

Last year, cold-storage inventories were much lower than the average as cattle numbers declined and rising slaughter weights did not keep pace.

This year, slaughter weights are much heavier than normal, and more production is being funneled into cold storage.




Even though pork stocks in the nation’s freezers roughly are following the average, they rose faster than normal in January and continued to widen the gap in February, March and April.  The result was an inventory of nearly 700 million pounds.

Analysts credited the rise in stocks to a combination of expanded production as the hog industry gets a handle on the Porcine Epidemic Diarrhea virus, a West Coast port work slowdown and a stronger US Dollar.  The Greenback has since lost some steam, which may affect product exports in coming reports.

It’s also interesting to note that the hog industry apparently had better overall control over the virulent PEDv disease that killed millions of baby pigs last year than generally was thought.  Pork stocks generally followed the seasonals all year.




Cash cattle markets were quiet as the market exits the Memorial Day holiday weekend.  Cattle last week traded steady to $1 per cwt lower at $159 to mostly $161 per cwt on a live basis and at mostly $256 on a dressed basis.

Beef prices Friday were lower, with the USDA choice cutout at $260.25 per cwt, down $1.97, and the select cutout at $247.62, off $1.70.  Volume was slow with 82 loads of fabricated product sold into the spot market.

The CME Feeder Cattle Index for the seven days ended Thursday was $220.30 per cwt, up $0.52, compared with the Aug futures settlement Friday of $219.00.