July 19, 2012

 

US pork stocks down 7%, beef at record high

 

 

As of June 30, pork stocks in US commercial freezers was down around 7% from the previous month but still the highest ever for June, while beef supplies are also pegged at a record high, according to the average of analysts' predictions.

 

The USDA will release its monthly cold storage report Friday (July 20) at 3 p.m. EDT.

 

Total pork inventories as of end-June are expected at 590.6 million pounds, compared with 636.1 million a month earlier and 495.1 million a year earlier, according to the average prediction of three analysts in a Dow Jones Newswires survey. Estimates ranged from 584 million to 597.8 million pounds. The current record for June pork stocks is 577.9 million pounds set in 2009.

 

If the average estimate is correct, frozen pork inventories at the end of last month were 18.9% above the five-year average.

 

Pork production in June was likely down 3.8% from last year and well below May output, resulting in the largest May-June decline since 1996, said Bob Brown, private analyst in Edmond, Okla. He predicts pork stocks at 597.8 million pounds.

 

Dan Vaught, president of Vaught Futures Insights, predicts total pork stocks at 590 million pounds, reflecting a 46.1 million-pound decline from the previous month. He said the normal pull down in stocks in June is about 33 million pounds. The latest month's decline may have been bigger than normal due to attractive prices during the spring and improved demand, he said.

 

Analysts on average predicted ham supplies in cold storage at 138.1 million pounds, up 8.9 million from the previous month. If correct, the increase was below the five-year average gain of 17.3 million.

 

Vaught predicts that ham sales to Mexico in June were again generally strong, limiting the number left to be added to US inventories. His end-June ham estimate was 135 million pounds. Brown estimates 141.1 million pounds of hams were in storage at the end of June, which would be the highest ever for that date.

 

In the beef sector, the analysts on average projected end-June stocks up a modest 1.2% from May and 16.6% above a year earlier. Vaught's estimate at 510 million was the highest. He said high wholesale prices may have stifled domestic demand. He also looks for the cattle-on-feed and cattle inventory reports to have more influence on cattle and beef prices than will the cold storage data.

 

The smallest estimate for end-June beef stocks was provided by Rich Nelson, director of research with Allendale Inc. He predicts a June 30 beef figure at about 500 million pounds. His estimate represents a gain of one million pounds from the previous month compared with a five-year average increase of about eight million pounds. The current record for June was set in 2006 at 449.1 million pounds, he said.

 

Brown predicts belly inventories at 56.6 million pounds, a decrease of 8.7 million pounds from the previous month, near the five-year average decline of 8.6 million pounds. End-June stocks are expected to be about 16.5% above a year earlier and nearly even with the five-year average.

 

Total chicken inventories are expected at 663.8 million pounds, up 2.6% from the previous month, 12.3% below a year earlier and 4.8% below the five-year average.