End-users stocking up on hams for the winter holidays pushed their total in U.S. cold storage warehouses in April beyond their five-year averages, an analyst said following Monday's government monthly cold storage report.
He added that last month's increased ham stocks also likely reflected product awaiting shipment that was initially purchased by China.
The U.S. Department of Agriculture's monthly cold storage report on Monday showed the total April pork inventory at 635.4 million lbs. That was up 21.6 million lbs from March but nearly in line with average analysts' forecast of 633.7 million.
Total April ham stocks at 130.2 million lbs rose close to 34 million pounds from March and accounted for most of pork's overall increase in inventory.
Bone-in hams last month totaled 58.6 million lbs, almost 21 million lbs more than in March versus the five-year monthly average gain of 7 million pounds.
And total boneless ham stocks in April at 71.7 million lbs, climbed 12.8 million lbs from March, which doubled the five-year average for the month.
"A lot of the total pork increase was driven by hams. That to me suggests people are putting them up for the Thanksgiving, Christmas and New Year's holidays," said independent market analyst Bob Brown in Edmond, Oklahoma.
He said processors and retailers typically begin building ham stocks from April through September for use later this year.
U.S. pork exports to China may have contributed to last months swollen ham stocks based on USDA's latest weekly export data, said Brown. China purchased a significant amount of hams, possibly the boneless variety, he added.
"The boneless freezer stock could partially be for throughput that's going to China because it has 109 million pounds of outstanding exports yet to ship in the latest report," said Brown.
Monday's USDA storage report included total beef stocks in April at 452.3 million lbs. That was down slightly from analysts' expectations of 459.8 million lbs and a 15-million lb decline from March, its biggest month-over-month drawdown in six years, according to analysts.
Rich Nelson, chief strategist with Chicago-based Allendale Inc, attributed to withdrawal to the industry possibly regaining market share lost during the West Coast port dispute last year.
Brown believes the bulk of the decline occurred in the boneless beef category. That, he said, implies that huge inventories of lean product imported from Australia and New Zealand is finally being taken out of freezers. (Editing by Jonathan Oatis)