September 23, 2010

US pork supply plunges 27% on shrinking herds

Pork stockpiles in the US fell 27% at the end of August from a year earlier as farmers cut the size of their herds and meat prices surged.

Warehouses held 384.9 million pounds of pork, down from 530.1 million on August 31, 2009, the USDA said. Inventories shrank 1.6% from the end of July.

August pork output may have been 2.5% smaller than a year earlier, analyst said. The USDA will release production data for the month on September 24. In June, the hog-breeding herd was near the smallest size on record, as losses in 2008 and 2009 spurred culls. Wholesale pork reached a record 96.74 cents a pound on August 24, according to the USDA.

Hog futures for December settlement fell 0.825 cent, or 1.1%, to 76.25 cents a pound at 12:50 p.m. on the CME. Earlier, the price gained 17% this year, partly on limited supplies.

Stockpiles of pork bellies, which are cured and sliced to make bacon, plunged 86% on August 31 from a year earlier to 6.89 million pounds, according to today's report. That's the lowest on record for the date, according to the USDA. Warehouse supplies of ham rose 2.7% to 139.6 million pounds.

Meanwhile, chicken-meat inventories at the end of August were 7.6% larger than a year earlier at 695.4 million pounds, the USDA said. Beef supplies shrank 8.3% to 385.2 million pounds.