CHICAGO (Reuters) — U.S. pork and beef inventories in February hit record highs for the month, showing ongoing export challenges compounded by ramped up hog production, analysts said following the Department of Agriculture’s latest monthly cold storage report.
The additional pork comes as processors moved hams into cold storage facilities for the Easter holiday season, while stockpiling pork chops and bacon ahead of outdoor cookouts and the summer’s popular bacon-lettuce and tomato sandwich season.
Excess meat supply means grocers will have to significantly cut product prices to consumers for the coming spring grilling season, said Chicago-based Allendale Inc. chief strategist Rich Nelson.
Monday’s USDA monthly cold storage report showed February pork inventories totalled 686.1 million pounds, which surpassed the February 2014 record of 654.7 million pounds.
Last month’s beef stocks totalled 492.1 million pounds, topping January 2015’s 491.9-million-pound record as well as the previous February 2013 high of 489.978 million pounds.
Beef stocks posted a record in February, but it was a marginal increase compared to the 90-million-pound addition of pork into storage, which was twice as much as the previous record inflow for February, said Nelson.
For pork, he said that vaccines and increased biosecurity measures offset the impact of the deadly porcine epidemic diarrhea virus, which brought roughly six percent more heavyweight hogs to market in February than anticipated and produced 6.6 percent more pork.
Even though the U.S. West Coast dock workers’ dispute was settled last month, shipments of pork — the most exported U.S. meat — are still backed up there and competing with domestic product.
Furthermore, analysts have noted the strengthening dollar has so far this year made U.S. goods, including pork and beef, less attractive to foreign buyers.
USDA’s latest data showed pork exports for January at 347.7 million pounds, down 21.4 percent from a year ago. Beef shipments totalled 162.7 million pounds, a 19.3 percent drop from the year before.
“We expected January to be a difficult month, so these results are not especially surprising,” U.S. Meat Export Federation CEO Phil Seng said recently regarding the slowdown in exports.