May 23, 2012

US pork stockpiles increased by 20% at the end of April from a year earlier as production rose, the government revealed.

Warehouses held 659.5 million pounds of the meat, up from 549.3 million on April 30, 2011, the USDA said. Inventories climbed 8.1% from the end of March.

US commercial pork output in the three months through March 31 totalled 5.858 billion pounds (2.7 million metric tonnes), up 2.4% from 2011, government data show. April pork production in the U.S. may have been the fourth-highest on record and up 3% from a year earlier, said Bob Brown, an independent market analyst in Edmond, Oklahoma.

"Production and stocks seem to be correlated," Brown said in a telephone interview before the report was released. "The higher the production, the higher the stocks." The USDA will report on April output on May 25.

As of April 30, stockpiles of pork bellies, which are cured and sliced to make bacon, surged 41% from a year earlier to 74.8 million pounds, according to today's report. Warehouse supplies of ham were 46% higher at 112.6 million pounds.

While the report was "not wildly bearish by any means," the increase in stockpiles was "certainly not supportive" and will "probably" weigh on hog prices tomorrow, Dan Vaught, the owner of Vaught Futures Insights, said in a telephone interview from Altus, Arkansas.

Chicken-meat inventories at the end of April were 18% smaller than a year earlier at 606.6 million pounds. Beef supplies on April 30 rose 17% to 517.5 million pounds, a record for the date, the USDA said.