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CME: Amount of Beef in Frozen Stocks More Than Expected

27 August 2018

US - Today, we review two recent reports, the USDA’s National Agricultural Statistics Cold Storage report (22 August) and the mid-year summary of the Canadian cattle numbers by Statistics Canada (published Thursday), reports Steiner Comsulting Group, DLR Division, Inc.

At the end of July, the amount of beef in frozen stocks was more than expected, while pork tonnage was less than anticipated. Year-over-year, beef in US freezers was up by 12.3 per cent. Total frozen pork tonnage slipped by 1.2 per cent. Chicken in commercial freezers, as expected, remained rather large (record large for the end of July, eclipsing the prior high set in 2002 by about 1 per cent).

Behind the aggregate pork cold storage numbers were some substantial year-over-year changes, and some were in different directions. For example, frozen pork bellies increased 119 per cent; total hams fell by 18 per cent; loins dropped by 18 per cent; and trimmings increased 33 per cent.

Note that even though belly stocks were dramatically above 2017’s, they were below 2016’s (down 24 per cent). Overall, compared to a year ago at this time, market participants have not been willing to speculate on higher pork prices by freezing products, but they are on bellies.

As of 1 July, Canadian cattle numbers slipped compared to a year ago. In 2017, the herd broke a downtrend and increased slightly. But abnormally dry conditions to moderate drought have struck major cowherd areas of several Canadian provinces this year, reducing forage and dramatically increasing hay prices. The latest Canadian Drought Monitor is as of 31 July (available here), and there are indications conditions have deteriorated since then.

The number of all cattle in Canada eroded by 100,000 head (down 0.8 per cent) between 1 July of last year and this year. Animals on dairy operations increased by 2.6 per cent, while those on beef operations dropped by 1.4 per cent (down by about 149,000 head).

Concerning both numerical and percentage declines, the most substantial drop was on cow calf operations (down by 187,000 head or 2.7 per cent). Cattle on feeder and stocker operations fell by 1.5 per cent (nearly 33,000 animals), while those in feedlots (feeding operations in the table below) were slightly above 2017’s.

Since 2014, the 1 July report has shown a drop in all cattle numbers of 585,000 head or by 4.5 per cent. Over that timeframe, the number of animals in Canadian beef farms has declined by nearly 624,000 head (down 5.7 per cent). In tandem, the 1 July Canadian cattle feeding count has fallen by just over 34,000 head (down 2.1 per cent).

Further Reading

You can view the Cold Storage report by clicking here.


Daily Livestock Report - Copyright © 2008 CME. All rights reserved.


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