CME: Inventory of Frozen Meat Down

US - USDA's monthly Cold Storage report, released on 22 November, indicates that the total inventory of frozen meat and poultry as of 31 October was smaller than either last month or the October 2010, write Steve Meyer and Len Steiner.

24 November 2011

4 minute read

North America

Detailed data appear in the table on page 2 of the full report (see link below).

Some key features are:

Total meat and poultry in freezers on 31 October amounted to 2.034 billion pounds, 4.4 per cent smaller than on 30 September and 1.6 per cent smaller than one year ago.

This is the closest that freezer inventories have gotten to the two billion pound level this year after spending much of last year below two billion pounds.

The decline in frozen stocks was led, as one would expect in October, by a sharp reduction in turkey inventories to 407.167 million pounds, 20 per cent lower than at the end of September and 3.7 per cent lower than last year. The normal further reduction of inventories in November will likely draw turkey stocks down to under 200 million pounds.

Chicken inventories were 5.3 per cent lower than one year ago but increased in October by 26 million pounds or 3.9 per cent. That increase in chicken stocks does not bode well given that production during October, based on weekly data, was down 6.9 per cent.

Chicken leg products were the main contributor to the October increase in freezer stocks, growing by just over 28 million pounds or 20 per cent from the end of September. When placed against the dramatic (at least, by chicken industry standards!) year-on-year reduction in production, this increase in leg product stocks suggest that October chicken exports were soft, to say the least.

Breast and breast meat stocks remain sharply larger (26.9 per cent) than last year but were steady for the month. But again — versus a nearly seven per cent reduction in production, steady inventories provide little encouragement regarding product movement.

Pork inventories actually declined in October by 0.2 per cent from their 30 September level. That’s not unheard of but is still pretty unusual (three times in the past 12 years) given that October is usually the peak month for pork production due to seasonally larger hog supplies and there being no holidays during the month. Inventories of 490.695 million pounds were 1.9 per cent larger than one year ago.

Belly inventories led the year-on-year decline in percentage terms (-63 per cent) and were second in tonnage terms (-14.637 million pounds). Ham inventories were 13.2 per cent lower than one year ago at 134.125 million pounds. That figure is over 20 million pounds lower than one year ago. Stocks of all other cuts except variety meats were higher than last year.

Hams – as expected – accounted for nearly all of the October reduction in frozen pork stocks, falling by nearly 30 million pounds (18 per cent) from 30 September.

Beef inventories of 414.215 million pounds were virtually even with one year ago and were 3.1 per cent lower than last month. Stocks of boneless beef were 2.5 per cent higher than one year ago.