June 23, 2010

US pork supply falls 23% on herd cuts

US frozen-pork stockpiles were 23% smaller at the end of May than a year earlier, as cuts to the domestic hog herd spurred declines in meat production.

Warehouses held 448.3 million pounds of pork on May 31, down from 584.5 million a year earlier, when supplies were the highest on record for the month, the USDA said Tuesday (Jun 22) in a report. Inventories fell 7.3% from the end of April.

Hog farmers have slashed herds after losing money because of high feed costs in 2008 and declining pork demand because of recession and swine flu in 2009. US commercial pork production may have shrunk by 5.7% in May from a year earlier, analysts said.

Hog futures for August settlement climbed 0.15 cent, or 0.2%, to 84.5 cents a pound Tuesday on the Chicago Mercantile Exchange. The most-active contract is up 39% in the past year as supplies shrank and pork demand rebounded. As of March 1, the US sow herd totalled 5.76 million, the fewest on record.

US warehouse supplies of ham fell 3.4% from a year earlier to 92 million pounds, according to reports. Inventories of pork bellies, which are cured and sliced to make bacon, plunged 44% to 43.7 million pounds.

Chicken-meat stockpiles at the end of May were 9% larger than a year earlier at 699.5 million pounds, the USDA said. Beef inventories shrank 13% to 363.8 million pounds.