The USDA cold storage numbers indicate beef is moving at a good pace, University of Tennessee ag economist Andrew Griffith says.
“The quantity of beef in cold storage at the end of June totaled 394.5 million pounds, which only represents 78% of the average weekly beef production in 2019,” he says in his weekly market outlook. “Thus, less than a week’s worth of beef production is in a freezer, which is an indicator that beef is moving at a decent pace.”
While there are relatively low amounts of beef in cold storage, pork is seeing higher levels. Beef levels in storage were at their lowest since the herd build-up years following the 2012 drought.
“The June value is the lowest quantity of beef in cold storage since October 2014, which corresponds to a time period when fewer animals were being harvested due to rapid expansion in the beef cattle herd,” Griffith says.
“Contrary to beef, the quantity of pork in cold storage at the end of June remained elevated. Pork in cold storage at the end of June totaled 622.4 million pounds, compared to 559.0 million pounds one year ago.”
Pork in cold storage usually follows certain trends, he says.
“The elevated level of pork in cold storage is not as perplexing as the fact that it only marginally declined from the May value,” he says. “Pork in cold storage generally declines in June and July due to reduced hog slaughter and lighter weight hogs going to slaughter.”
Looking ahead, Griffith says the demand for yearling cattle looks like it will hold steady or improve.
“The recent upswing in cash and futures prices is keeping purveyors on their toes as the market is trying to follow its seasonal tendency,” he says. “There has been good demand for yearling cattle the past few weeks, and the demand for weaned and vaccinated cattle remains strong.
“It is always difficult to project what the market is going to do, but the best guess on yearling cattle is for the market to remain steady or gain a few dollars over the next four to five weeks.”