October 26, 2012
US meat and poultry inventories have risen 6% on-year, to 2.26 billion pounds on September 30, 2012, according to the latest USDA Cold storage Report.
Total beef volumes in US cold storage as at September 30 were steady on-year, at 426 million pounds.
Inventories of boneless beef, however, declined 3% on the corresponding period in 2011, to 354 million pounds. As boneless beef supplies tighten, beef trimming prices are expected to rise towards Christmas and into early 2013. US boneless beef supplies in the short term continue to be impacted by the US drought, with any future improvement in pasture conditions likely to lead to a decline in beef cow slaughter, further tightening supplies.
The latest National Oceanic and Atmospheric Administration's US Seasonal Drought Outlook indicates that while the persistence of exceptional drought is anticipated to remain across the plain states, rainfall is expected to bring some additional relief to the upper Mid-west and eastern regions in the three months to January 2013.
Lamb and mutton stocks for September were also lower than the previous month, despite domestic lamb and mutton production over the five weeks to September 29 increasing 15% on-year. Corresponding with the recent rise in production, average wholesale lamb carcase (55-65 pounds) prices averaged 22% lower.
Following the surge in inventories in August, pork volumes in cold storage remained higher in September, totalling 28% above year ago levels, at 631 million pounds. While pork prices declined alongside ample supplies in August, hog slaughter in September eased, with inventories expected to moderate in the lead up to the holiday season. As anecdotal evidence suggested, US pork producers have increased hog marketing and limited growth expectations in response to record high feed costs.
Chicken inventories continued to decline in September, down 3% on-year, to 652 million pounds. While the lower stock levels have placed upward pressure on the price for most broiler products, the USDA expects slightly higher broiler meat production and ending stock levels in the fourth quarter of 2012.
