Cold storage report may lend support to meat prices

Beef and pork inventories both decline, while poultry slightly increases.

The supply of beef, pork and poultry in cold storage on March 31, 2016, was 2.235 billion lb., a 0.7% decline from a year ago and 1.2% lower than the previous month.

Steve Meyer and Len Steiner, in the “Daily Livestock Report,” pointed out that in four of the last five years, March inventories have increased from February, and the last time total meat inventories decreased in March was in 2014. “The fact that inventories declined should be seen as positive for prices going into the high demand spring period,” they added.

Total frozen poultry supplies on March 31, 2016, increased 1% from the previous month and 6% from a year ago. Total stocks of chicken declined 2% from the previous month but increased 5% from last year. Total pounds of turkey in freezers rose 8% from last month and 6% from March 31, 2015.

Total red meat supplies in freezers fell 3% from the previous month and 6% from last year.

Total pounds of beef in freezers decreased 5% from the previous month and 3% from last year. Oklahoma State University Extension livestock marketing specialist Derrell Peel said the decline follows considerable concern that developed in January as beef in cold storage reached the highest monthly totals since November 2006.

“Cold storage inventories are indicative of market conditions and may reflect changing short-term beef demand conditions and changing beef imports and exports,” he said.

Steiner and Meyer noted that a backlog in fat trim has been cleaned up, which has helped reduced beef in cold storage. Additionally, fewer imports have contributed to the reduction. “This may be viewed as supportive for beef prices going into Memorial Day,” they said.

Frozen pork supplies decreased 2% from the previous month and 9% from last year. Stocks of pork bellies increased 6% from last month but were 5% lower than last year.

“Probably one of the more supportive items in the report was the inventory of pork trim, down 35% from last year and 23.5% lower than the five year average,” Steiner and Meyer noted. “Hog slaughter has been relatively high in (the first quarter), but trim markets appear to be very current, and this has likely been the reason for the sharp price escalation in pork trim values the last two weeks.”

Total natural cheese stocks in refrigerated warehouses on March 31, 2016, rose 1% from the previous month and 11% from March 31, 2015. Butter stocks were up 3% from last month and 32% from a year ago.

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