The USDA released its monthly Cold Storage report on May 22, stating April 30, 2015 U.S. pork stockpiles at 699.6 million pounds. That marked a 19.8 percent annual increase, thereby seeming to confirm bearish ideas about excessive summer supplies. However, this latest figure actually fell about 1.4 million pounds below the all-time record posted in April 2013.
Moreover, forthcoming slaughter totals seem likely to only moderately exceed those seen two years ago, when June-August quotes for the CME index averaged 100.73 cents/pound. Thus, we continue arguing that recently depressed prices also reflect considerable demand weakness. We still think resurgent consumer buying will power a larger late spring-early summer rally than is generally anticipated.
Soaring ham stocks played a big role in boosting total pork inventories last month. The April result leapt 35.6 million pounds, to 135.6 million in late April, thereby smashing the April record set in 2013. However, it’s much too early to expect a glut of hams during the year-end holiday season, especially with the turkey industry in a state of flux in the wake of the huge Minnesota avian influenza outbreak.
Ham stocks peaked around 220 million pounds in October 2012 and 2013, so a “normal” stock build through mid-2015 might fall short of those highs.
While the Cold Storage report stated April 30 whole turkey stocks at 216.5 million pounds (up 23.5 million pounds annually), the reduced output from the top turkey-producing state may create a comparative shortage of holiday dinner entrees, especially if wild birds migrating south for the winter trigger another bird flu outbreak.
The Pork Academy offers several sessions on Wednesday, June 3, including a 10:15 a.m. session on keeping a secure pork supply, presented by Pam Zaabel of Iowa State University; and a 2:30 p.m. seminar by Dermot Hayes on “U.S. Pork Exports – Situation and Outlook.”
Editor’s Note: Dan Vaught is a livestock economist for Doane Advisory Services, St. Louis, Mo. Doane distributes a number of timely, relevant newsletters to farmers that contain expert commentaries and market advice. For more information, call 314.569.2700 or go to: www.Doane.com.