Cold Storage Similar to Year Ago

Grocery Store Beef Meat
( Wyatt Bechtel )

USDA-National Agricultural Statistics Service (NASS) released their estimates of food in cold storage facilities at the end of 2018 on Feb. 22, about a month later than normal. For the most part, meat and poultry inventories were close to year ago levels, which was slightly less than expected. Beef inventories were 2% higher than a year earlier. The 8 million pound increase from a year earlier was similar to the year-over-year increase at the start of the quarter (October 1). Notably, beef inventories stored in the form of boneless product were up 3.5% from a year earlier while beef cut inventories were down 20%. Pricing on beef sold as cuts, such as loin and rib steaks or roasts were strong in late 2018 and early this year, consistent with tight inventories. Cattle slaughter beginning late last year has run below expectations as feedlots struggled with cold, wet feedlot conditions that thwarted efficient weight gains.

The timing of late 2018 holidays as mid-week events also delayed some slaughter schedules. This has been an issue for pork, chicken and other meat processing industries, also. Less weekly flow of product moving through processing plants probably limited the amount of product moving into freezers temporarily. The 19 million pound decline in beef in cold storage during December from the previous month was the biggest December decline for beef since 1998.

Frozen pork inventories ended 2018 up 3% from a year earlier. Inventories of pork ribs accounted for all of the increase and then some. Total pork in cold storage declined month-over-month during December by 2 million pounds, the smallest December reduction since an 11 million pound increase in December of 2014. Pork rib inventories this December jumped 16 million pounds. Over the last ten years, December inventories of pork ribs have usually increased 5-10 million pounds.

Frozen inventories of chicken fell below year earlier levels at the end of December for the first time in 2018. A 47 million pound decline in inventories during December set a record for that month, modestly exceeding a big adjustment in December 2008. Wing inventories played a big role in the decline, but are still higher than a year earlier.