Beef stores shrink in pounds, grow in share of total meat

Markets
Aug 31, 2012

The most recent Cold Storage report shows stocks of total red meat and poultry in cold storage as of July 31 at 2.24 billion pounds (bp). Of that, beef represented roughly 20 percent at 455.74 million pounds (mp). When compared to the previous report, beef in cold storage dropped 3 percent but increased in its portion of overall red meat storage.

Beef and red meat

Overall red meat—which includes beef, pork, veal, lamb and mutton—in cold storage as of July 31 stood at 1.03 bp. This was down 5 percent from June 30’s 1.09 bp, but up 15 percent from the same time last year at 894.19 mp.

As mentioned, there were 455.74 mp of beef in cold storage as of July 31. This is a 10 percent increase over the same time in 2011, which had 415.2 mp of beef in cold storage. Compared month-to-month, this July’s stocks were 3 percent below June 31’s stocks of 468.73 mp.

“End users remain very concerned about beef price inflation later in the year and many are using freezer hedges to protect prices at least for the next few months,” commented CME.

Pork in storage stood at 546.55 mp on July 31, with bellies at 28 mp. Compared to last year, overall pork in cold storage is up 20 percent and bellies are down 5 percent. When compared to June of this year, July 31’s total pork and bellies numbers are down 8 percent and 32 percent, respectively.

Despite the month-to-month decline, the amount of pork in storage is adding to the pressure on pork producers to liquidate herds, according to CME.

“Higher pork freezer inventories and reports that producers have embarked in significant culling of the breeding herd have put downward pressure on hog and pork prices in the near term. With corn and soybean meal prices at record high levels, producers are wasting no time in pushing hogs to market.”

When assessed in the scope of overall red meat, beef represented 44 percent of all of the July 31 red meat in storage. This is up from the prior month when beef represented 43 percent of total red meat in storage, but down 2 percent from its share on July 31, 2011. Pork represented 53 percent of the most recent red meat in cold storage. This is down from the prior month when it was 55 percent, but up from July of last year when it was only 51 percent.

Poultry

Chicken in cold storage as of July 31 stood at 648.64 mp. This number was steady with the prior month and 14 percent below last year’s July 31 numbers of 757.11 mp. When compared to the overall poultry in cold storage—which includes turkeys and ducks—numbers of 1.21 bps, chicken represented 54 percent of stored poultry. This was steady with its portion of the total poultry calculation from the prior month and down 5 percent from its share of the July 31, 2011, total poultry numbers.

Cold storage turkey stood at 554.98 mp, up 1 percent from June and up 6 percent from the same time last year. Similar to its actual stock numbers, turkey’s share in the total poultry in cold storage has gone up. On July 31, 2011, turkey represented 41 percent of the total poultry stored, in June of this year it was 45 percent, and as of this July 31, it was 46 percent. — Kerry Halladay, WLJ Editor

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