Urner Barry analyst Russ Whitman said January's comparatively modest monthly increase in frozen turkey stocks helped improve cautious trade sentiment that developed in the wake of last month's storage report. At 279 million lb., the Dec. 31 figure represented the third-most significant volume on record and a year-over-year increase of 40%. The 42 million lb. advance in holdings which was recorded for the month was almost twice the five-year average.
“For sellers attempting to draw a line in the sand, making a convincing sales pitch was challenging. However, the end of January inventories may help their cause a little,” Whitman said. At 339 million lb., Jan. 31 freezer stocks were 17% above last year and the inward movement during the month was 60 million lb., 13 million below the five year average.
From a marketing standpoint, Whitman said sellers can breathe a bit easier when looking at year-over-year percentage comparisons and the level of inward movement.
“Nevertheless, the road to successfully marketing turkey this year will still be impacted by inventories which are currently higher than 2016 in every category except for mechanically deboned meat.”
In that sector, Whitman explained that the quarter's attractive prices have stimulated both export and domestic demand to a greater degree than seasonal factors on their own would likely have otherwise done.
“Looking ahead, total production is expected to move higher for the year. With already significant freezer stocks on hand, those merchandising turkey in 2017 will have their work cut out for them.”