Chicago | Reuters –– Slumping demand for meat on the U.S. West and East Coasts boosted pork, beef and chicken inventories to some of their highest levels in years, analysts said following Friday’s U.S. Department of Agriculture monthly cold storage report.
Meat processors and grocers normally stash hams in freezers before the Easter holiday and steaks, pork chops and chicken ahead of the summer grilling season.
Friday’s USDA report showed January pork inventories totaled 596.5 million pounds, up 18 per cent from December, partly due to increased production.
January’s pork stocks showed their biggest increase for the month since 2012, led largely by the 67 per cent jump in hams stored since December.
Total January beef stocks came in at 490.9 million lbs., a record high for the month.
The government pegged January’s total chicken inventory at 730.1 million lbs., up six per cent from a year ago and a four-year high for January.
“Anytime you get over 700 million lbs. in poultry, it’s a lot,” said independent market analyst Bob Brown in Edmond, Oklahoma.
Ron Plain, a University of Missouri livestock economist, attributed the bulge in cold storage to the inability to move meat off the West Coast.
Pork likely felt the brunt of the impact because more of it is shipped outside the U.S. than other meat proteins.
The U.S. labour secretary has joined talks with shipping executives and union leaders for dock workers to help end a dispute that led to disruptions at 29 West Coast ports.
Even if a deal is struck soon, it could take several weeks or even months to clear the backlog, which could keep a lid on domestic meat prices until then, experts said.
Bouts of wintry weather from Chicago eastward made it difficult for packers to transport meat to their consumers, and likely hurt meat consumption in hardest hit areas, Plain said.
And according to analysts, the dollar’s surge of more than 16 per cent during the last nine months made U.S goods less attractive to foreign buyers, thereby exacerbating storage stocks.
Chicago Mercantile Exchange live cattle and lean hogs futures on Monday could have a moderately bearish reaction to Friday’s USDA cold storage results, said Rich Nelson, chief strategist with Chicago-based Allendale Inc.
— Theopolis Waters reports on livestock markets for Reuters from Chicago.