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CME: Total Beef Supply in Cold Storage at November-end Lower Than a Year Ago

25 December 2019

US - Record pork production and increases in both poultry and cattle slaughter contributed to higher than normal increases in the supply of meat protein in cold storage, according to Steiner Consulting Group, DLR Division, Inc.

However, it is also important to note that as US producers rely on exports for a larger share of their production this often also results in an increase in cold storage inventories. This means that higher cold storage numbers do not always hold bearish implications. It is important to dig into the details and look at the specific product rather than the headline number.

The combined inventory of beef, pork, chicken and turkey in cold storage at the end of November was estimated at 2.274 billion pounds, 2.2 percent higher than a year ago and 9.3 percent higher than the five year average.

The combined month end inventory of the four main species declined by 6.3 percent from October levels. This compares to an average drawdown of 9.7 percent in the last five years, which is part of the reason for the ’bearish’ take.

The total supply of beef in cold storage at the end of November was 480.4 million pounds, 6.7 percent lower than a year ago and 1.7 percent lower than the five year average. Boneless beef inventories increased at a faster pace than normal in November. This could be due to end users looking to increase their inventories to protect against continued price increases in 2020.

The inventory of bone-in cuts in storage was 18 percent lower than last year and 13 percent lower than the five year average. We think that inventory will decline further in December and end users draw down the supply of bone-in roasts they accumulated for Christmas needs.

Daily Livestock Report - Copyright © 2008 CME. All rights reserved.

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