August 26, 2009

US frozen pork supplies stored in warehouses surged to a record high last month amid slumping export demand and global economic troubles, a government report has concluded.

Analysts said the amounting of supplies could translate to cheaper pork prices for US consumers.

Total frozen pork in US warehouses declined about 5 percent during July due to seasonal summer demand for bacon and grilling items, but stocks were 7-percent above last year's record end-of-July tally, according to the USDA's monthly cold storage report.

The report is expected to weigh on Chicago Mercantile Exchange hog futures - which are hovering around seven-year lows - and will likely keep pressure on US pork prices going into the fall.

Archer Financial broker Dennis Smith said the last report for June had a negative, sort of sobering effect on the market and this will probably have the same impact.

Smith and other livestock analysts noted that exports have been slower than anticipated due to the weak economy in the US and abroad and the AH1N1 flu.

This caused US wholesale pork prices to fall this summer to their lowest level since January 2003.