Red Meat in Cold Storage Declines; Poultry Increases

Amidst trade tariff and retaliation tariff cycles, one of the big takeaways in cold storage is how little pork inventories changed. Total pork in cold storage remained unchanged in the month of June compared to the previous year and was below prior month by 10%. Of the 12 categories of pork tracked, bellies and trimmings were the only two categories to show worrisome year-over-year gains, up 130% and 38%, respectively. Although bellies are still building back from historically low levels of the prior year, both cuts also declined relative to May inventories, providing some comfort that the market is continuing to work through large pork supplies and changing trade landscapes.

Beef fared moderately, increasing 8% from the year earlier but declined 3% from the month of May. Veal and sheep meat also continued to post lofty year-over-year gains, but lamb and mutton was the only red meat category to show an increase from the previous month. Overall, total red meat was up 5% compared to last year but declined 7% relative to the prior month.

Poultry stocks again were worrisome, increasing relative to a year ago and a month ago. Notable increases were in turkey legs (up 44% year-over-year, and 23% month-over-month), chicken drumsticks (up 76% year-over-year, 13% month-over-month), chicken wings (up 35% year-over-year, 2% month-over-month) and chicken paws and feet (up 93% year-over-year, 22% month-over-month).

As much as trade is weighing in the current market, the most recent cold storage and trade data does not reflect the full weight of what has happened or will happen in the export markets. Poultry products did make the list of retaliatory actions by China. The U.S. exports very little poultry meat to China, but about 25% of total poultry meat exports go to Mexico. Larger production is the majority of what is driving the current levels in cold storage, but that could change in the coming months for poultry and pork.