Cold storage totals remained high in last week’s USDA report.
The combined inventory of pork, beef, chicken and turkey April 30 was 2.455 billion pounds, 2.1% higher than a year ago and 3.7% higher than the five-year average, economist Len Steiner and associates said in their Daily Livestock Report May 22. The inventory was up 1.2% from March.
“Coming into this report, there was a lot of speculation that high prices would result in a sharp pullback in cold storage,” they said. “That was not the case.”
A sharp decrease in demand from the food service industry could be a major factor.
“The big spike in prices was a result of lower slaughter and limited retail supplies,” Steiner and associates said. “Frozen inventories could do little to ease spot retail shortages.”
The beef supply in cold storage was 490 million pounds, 13.9% higher than a year ago. Boneless beef totals of 459.2 million pounds were up 15.8% from 2019.
“We see the increase in boneless beef inventories as a direct result of the slowdown in food service demand,” Steiner and associates said. “Prices for beef cuts were sharply higher in April, resulting in a higher draw-down of frozen cuts, likely going to support processing needs.”
Cold storage pork totals were estimated at 614.8 million pounds, down 1.2% from a year ago and 3.5% lower than the five-year average.
“Normally belly inventories increase in the spring as end users get ready for summer demand,” Steiner and associates said. “This year, belly freezer inventories were already quite large and the slowdown in food service demand made it difficult for processors to work down some of these stocks.”
The frozen chicken inventory came in at 933.6 million pounds, 6% higher than in 2019 and 14% higher than the five-year average. The supply in cold storage was 933.6 million pounds, 6% higher than a year ago and 14% higher than the five-year average. Steiner and associates said decreased food service demand also cut breast sales in April.