MEAT IN COLD STORAGE

Last week USDA-NASS released the monthly cold storage report which reported frozen stocks of red meat above a year ago on December 31, 2011, driven by both larger beef and pork stocks. However, chicken supplies at the end of 2011 were significantly smaller due to ongoing contraction within that sector.

As of December 31, frozen pork supplies were 1.2% larger than at the end of 2011 but down 3% from the prior month. On an item basis, frozen supplies of pork variety meats were 61% larger than a year ago which could be the result of either a potential slowdown in export trade or stockpiling of product for future export trade. Other items that were above a year ago on December 31, 2011 were bone-in picnics up 36%, pork butts up 21% and loins (bone-in and boneless) up 13%. Frozen stocks of bellies were down nearly 20% reflecting continued strength in the demand for bacon products.

Frozen stocks of beef at the end of 2011 were 1.4% higher than the prior year and were over 2% larger than at the end of November. According to the report, beef stocks at the end of December were the largest reported since February of last year. Supplies of frozen beef cuts on December 31, 2011 were up 8%, while boneless beef stocks were only slightly larger than the prior year.

USDA reported total frozen supplies of chicken as of December 31 were down about 22% from a year ago but broiler/fryers/roasters stocks (a relatively small category) were about 1% larger. A category with frozen stocks above a year ago was paws and feet were (up 41%), a key export item which could mean some sluggishness in trade. At the end of 2011, the largest year-on-year declines were reported in frozen stocks of chicken legs (down 52%), followed by wings (down 39%) and leg quarters (down 32%).