Beef supplies in cold storage were 8% higher on June 30, 2018, compared to the same period last year. USDA’s monthly cold storage report, released Monday, July 23, estimated 448.6 million pounds of beef in cold storage, 33.2 million pounds more than last year.
Total red meat supplies in freezers were up 5% over last year, and total frozen poultry supplies were 6% higher than last year. Overall, total cold storage of red meat and poultry exceeded 2.5 billion pounds.
Growing surpluses of red meat and poultry in cold storage raises anxiety for the U.S. meat industry that increasingly depends on exports. Such concern has increased as Mexico and China – among the largest buyers of U.S. meat – have imposed tariffs on U.S. pork in response to U.S. tariffs on steel, aluminum and other goods.
Any reduction in U.S. beef, pork and poultry exports would come at a time when production of all red meat and poultry is on the rise. Americans are expected to consume 222 pounds of red meat and poultry in 2018, the largest total in more than a decade. A reduction in exports would put even more red meat and poultry on the U.S. market, pushing prices lower on all products.
The Wall Street Journal reported the U.S. meat industry’s specialized warehouses built to store meat and other goods is reaching capacity.
“We are packed full,” Joe Rumsey, president of Arkansas-based Zero Mountain Inc., told The Journal. The company’s five storage facilities serve as way stations for turkeys and chicken strips between processors and retailers, holding around 250 million pounds of products on any given day.
The combination of trade risk and expanding meat supplies could result in “one of the biggest corrections we’ve seen in the industry in several years,” said Christine McCracken, protein analyst at Rabobank.
U.S. Ag Secretary Sonny Purdue has said the Trump administration recognizes the financial hardship livestock producers could face as a result of retaliatory tariffs, but farm country will be better off under new trade deals the administration is pursuing.
USDA said total frozen poultry supplies on June 30, 2018 were up 3 percent from the previous month and up 6 percent from a year ago. Total stocks of chicken were up 2 percent from the previous month and up 10 percent from last year. Total pounds of turkey in freezers were up 5 percent from last month but down 1 percent from June 30, 2017.
Total red meat supplies in freezers were down 7 percent from the previous month but up 5 percent from last year. Frozen pork supplies were down 10 percent from the previous month but up slightly from last year. Stocks of pork bellies were down 16 percent from last month but up 130 percent from last year.