Typically, frozen supplies of pork have not affected live hog prices much. But in the last couple of years, large frozen stocks have been one more contributing factor dragging down price recoveries.

Packers own the lion’s share of the pork in cold storage. So, when their freezers are full of pork, they are less apt to bid aggressively for live hogs than if they were moving all their pork. The current stocks are up a little from last year, which could help hold prices in the mid $30 range for much of the coming year. Ron Plain, University of Missouri agricultural economist, says current frozen stocks are large enough to hold live hog prices down about $1 per hundredweight.

USDA released its frozen stocks report Dec. 20, showing a 7 percent increase in pork in cold storage from a year ago, when frozen stocks were also high. Frozen stocks are currently running about 100 million pounds higher than the average.

This month’s increase was fueled by an increase in frozen bellies, up 48 percent from a year ago and 88 percent over last month.

The very strong demand for bacon from the early parts of 2000 may be softening,” says Plain. “Bacon prices may have simply risen so high that belly usage has been slowed.” Last year prices were about $2.55 per pound, while this year the prices have been closer to $3 per pound for bacon.

This counters the seasonal disappearance of hams which are down 29 percent from last month. The holiday season coupled with high turkey prices and low supplies of turkeys have spurred the increase in ham demand.

The total supplies of pork in cold storage were 453.4 million pounds, up from 443.9 million pounds last year and 422.5 million pounds last month.

These supplies are enough for a 9-day supply. This means if no hogs were killed for 9 days, there would still be enough pork to fill demand. About a week’s supply is generally considered enough pork to fill unforseen demand, while not dragging down prices of live hogs in the process. So this means frozen stocks are a problem and a contributing factor to lower live hog prices, but not something to lower the live hog prices significantly.