Thu, 24 May 2018
US - The inventory of beef, pork, chicken and turkey in cold storage at the end of April was estimated at 2.472 billion pounds, 6.7 per cent higher than a year ago and 9.7 per cent higher than the five year average, reports Steiner Consulting Group, DLR Division, Inc.
Inventories in April increased 2.6 per cent compared to the previous month while on average in the last five years April inventories have increased by 4.3 per cent. Larger cold storage stocks and higher production in May/Jun/Jul should help moderate price inflation across the category.
The inventory of boneless beef at the end of April was 434.8 million pounds, 4.6 per cent higher than a year ago and 2.9 per cent higher than the five year average. Higher prices for fat beef trimmings last year likely caused some end users to accumulate product to cover their needs in May, ahead of seasonal retail demand.
Beef imports have also increased, which may have bolstered the supply of beef in cold storage. Boneless beef inventory in the Middle Atlantic region, which covers the port of Philadelphia, was 142 million pounds at the end of April, 15 per cent higher than a month ago.
On the other hand, inventories in East and West North Central, where many packing plants are located, were down 2 per cent and 6 per cent, respectively vs. March levels.
There is more pork in cold storage compared to a year ago but the inventory build has been in line with what we have seen in recent years. Still, with more pork expected to come to market in late spring and summer, and softer export demand, the larger inventory may temper the seasonal price increases we see during this time of year.
Ham inventory was 112.3 million pounds, 0.5 per cent higher than last year and 4.5 per cent lower than the five year average. Ham inventories increased 16.5 per cent vs. the previous month compared to a 25 per cent average increase we have seen in the last five years. Ham prices have been quite weak recently and we think in part this is due to a lower than normal inventory build.
With record pork supplies expected later in the year, end users are reluctant to put hams in cold storage at this time. The lower inventory build may also suggest a slowdown in export business. As a result, packers have had to keep lowering ham prices in order to induce processors to take more and/or convince traders and other domestic end users to take hams off their hands.
Pork belly inventories were 64.6 million pounds, 92.5 per cent higher than a year ago but just 2 per cent higher than the five year average. Current belly stocks are more in line with normal levels. With the belly primal trading in the mid‐80s back in April it appears processors were willing to accumulate inventory ahead of summer demand.
Inventories in April rose 9 per cent compared to the previous month while in the last five years inventory build averaged 11 per cent. Again, we don’t see anything out of the normal here. Indeed, it was last year that was an aberration. Pork trim prices have been weak and it appears more product has ended up in the freezer.
Combined with the weak ham prices, we think this will continue to keep pork trim values in check as we go into the high demand summer months. Total trim inventory at the end of April was 57.5 million pounds, 41.6 per cent higher than a year ago and 13 per cent above the five year average. Trim inventories in April rose 2 per cent compared to the previous month when on average they tend to decline during this period.