The U.S. Department of Agriculture is expected to report a decline in the amount of pork held in the nation’s freezers last month, yet supplies are to remain well above year-ago levels.
The agency will release its monthly cold storage report Wednesday at 3:00 p.m. EDT
The USDA is expected to report frozen pork supplies as of May 31 at 511.1 million pounds, down 34.7 million, or 6.4%, from a month ago, according to the average prediction of three analysts in a Dow Jones Newswires survey.
Estimates range from 509.3 million to 514.1 million pounds. If the average estimate is correct, the amount of pork in cold storage as May 31 was 14.6% above a year ago, but about 1% below the five-year average.
May is normally a period of strong demand as supplies of fresh pork tighten because of a seasonal pullback in production, analysts said.
Cooler-than-normal temperatures helped to dampen demand last month, yet the weakness was partially offset by strong exports, said Rich Nelson, director of research with Allendale Inc.
USDA data show exports of pork cuts and organ meats in April were up 16% in volume from a year ago, with the year-to-date increase at 18%.
High prices also contributed to slower domestic sales, said Dan Vaught, president of Vaught Futures Insights.
Frozen ham stocks normally increase in May as product is stored for use later in the year. Analysts on average expected the USDA report to show 13.9 million pounds were added last month, compared with a five-year-average of 12.4 million pounds. The larger-than-average increase was likely driven by weak demand, leaving more meat available for cold storage, analysts said.
If the survey is correct, ham stocks stood at 90.6 million pounds at the end of last month.
The average estimate for pork-belly stocks as of May 31 was 54.4 million pounds, with a range of 47.1 million to 61.8 million pounds. If the average is correct, belly stocks will have risen 2.3% from a month ago, and stand 23% above year-ago levels and about 17% below the five-year average.
The wide range in analysts’ estimates comes from uncertainty over demand for bellies, which are used to make bacon, and adjustments made in weekly data put out by the Chicago Mercantile Exchange.
As for beef, supplies in cold storage as of May 31 are expected at nearly 448 million pounds, up about 1% from April and 23% above a year ago, according to the survey. The five-year average for beef stocks is 411.8 million pounds.
Analysts said strong exports, up 31% by volume for the first four months of the year, have helped keep total beef supplies in check, countering a likely slowdown in domestic demand.