Pork Profit Maximizer – Food Service Edition for April 30, 2018

The inventory of all pork products in cold storage at the end of March was 611.0 million pounds, 12% higher than a year ago and at the same level as the five-year average. In the last five years, the average drawdown of pork cold storage supplies in March was 3.7%. This year March inventories increased slightly from February levels. The drawdown in ham stocks in March was 22% compared to a 21% average for the last five years. Lower belly prices appear to have pushed more bellies cold storage.

We don’t know exactly where these bellies are accumulated since USDA does not provide a breakdown by region due to confidentiality issues. Total belly stocks at the end of March were 59.2 million pounds, 187% higher than a year ago and now 3.8% higher than the five-year average. Inventories increased 21% in March vs. February, compared to a 3% average gain in the last five years. The last time we saw Feb/Mar inventories increase by a similar amount was in 2013. That year the pork belly primal was flat through March but then rose 40% between April and early August.

Large slaughter has increased the amount of pork trim, pressuring prices. Seasonally pork trim prices increase in the spring and this likely caused packers and traders to push more trim into the freezer. Total pork trim inventories at the end of March were 56.4 million pounds, 41% higher than a year ago and 9.7% higher than the five year average. In- ventories rose 10% m/m compared to an aver- age 4% increase in the last five years.

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