Declining Livestock Inventories Contribute to Drop in Meat in Cold Storage

Cold storage, particularly for red meat and poultry, is an important part of the protein supply chain, with meat in cold storage coming from a variety of sources and used in both domestic and global markets. This Market Intel evaluates USDA-National Agricultural Statistics Survey’s March Cold Storage report, released on March 25, and analyzes overall supply and demand for animal proteins in 2024.

What’s in the report?

USDA’s monthly Cold Storage report measures reserve food supplies held in commercial and public warehouses. All stocks in the March report represent inventory in cold storage on Feb. 29, 2024. Red meat in freezers was estimated to be 1.05 billion pounds, down 4% from February 2023 and the lowest it has been in 23 years (Figure 1). Frozen poultry stocks, a separate measure from red meat, were 1.03 billion pounds in February 2024, down just 1% from last year. These changes were somewhat expected since nearly all animal protein sectors are experiencing or will experience lower inventories in 2024 and beyond. When the supply of any commodity falls, it’s common for market volatility to increase. When demand simultaneously remains strong, prices typically move higher.

Beef

Also published on March 25, USDA’s monthly Cattle on Feed report indicates that there were 11.8 million head of cattle on feed on Mar. 1, up 1% from the same time in 2023. Farmers placed 1.89 million head of cattle on feed in February, up 10% from 2023 and the highest on record for any February. This indicates that there is still more liquidation occurring in the U.S. cattle industry.

While this elevated number of cattle on feed will help keep beef prices at the grocery store suppressed, it’s important to consider the declining cattle inventory and the decreasing quantity of beef in cold storage. When placements begin to fall, there won’t be cattle available to replace them. A drop in the supply of beef will follow, resulting in smaller amounts of beef held in freezers. USDA’s estimate of beef in cold storage on Feb. 1 was 442.75 million pounds, the lowest in a decade.

Pork

USDA’s Quarterly Hogs and Pigs report, released March 28, contains data from 16 major production states including total inventory, farrowings, farrowing intentions, pigs per litter, and pig crop for each respective quarter of the year. The first quarter sets the tone for the year.

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