USDA released its monthly Cold Storage Report this week, showing meat and poultry stocks are entering freezers at a faster pace than a year ago. The combined beef, pork and poultry inventories on Dec.31, 2008, at 2.193 billion pounds, were about 13 percent higher than the previous year, and 14 percent higher than the five-year average.
A decline in export sales, as well as a abundant supplies earlier in 2008 are reasons why more meat is being placed on ice.
For pork, total stocks closed 2008 at 549 million pounds, that's nearly 20 percent higher than both year-ago stocks and the five-year average. This is a foreboding trend for the pork complex as supplies typically decline from November into December. Not so the case for 2008.
"We think this is another indication that pork exports have slowed down considerably, causing packers and exporters to back more product in freezers," according to Steve Meyer, president Paragon Economics, and the Steiner Consulting Group, in the CME Group Daily Livestock Report.
USDA reported year-end ham supplies at 63.3 million pounds or 29 percent higher than in 2007, and 49 percent higher than the five-year average. Pork belly stocks, at 51.7 million pounds were 5.6 percent lower than in 2007, but 3.6 percent higher than the five-year average. The fact that bacon is still moving as a whole is good news, but those sales could slow quickly if consumers stop eating away from home. Pork trimmings are up as well, 21.3 percent higher than 2007, and up 50.6 percent compared with the five-year average.
USDA reported total beef stocks at 481.7 million pounds, just 0.2 percent lower than 2007, but 5.7 percent higher than the five-year average.
Total broiler stocks were 741.2 million pounds, up 3.1 percent from 2007 and 2 percent above the five-year average. December broiler stocks, however, declined sharply from the previous month, a result of the tightening chicken supplies.
Source: USDA, CME Group