CHICAGO Feb 21 The amount of pork in U.S. cold
storage warehouses in January hit a record high for a second
month in a row, according to the U.S. Department of
Agriculture's monthly cold storage report issued on Friday.
Analysts in part attributed last month's record stocks to
processors and packers who likely stockpiled product in
anticipation of tighter supplies as a deadly pig virus spreads
on U.S. farms.
Friday's USDA report showed pork inventories last month
totaled 623.7 million lbs, up 69.4 million from December and up
17.3 million from a year ago. It was the most ever for the month
of January after surpassing the 554.3 million record in December
and January 2013's record of 606.425 million.
"Pork stocks fed off December's record and inventories
usually increase in January," said independent market analyst
Pork bellies, which are processed into bacon, represented
the lion's share of that increase as end-users stocked up for
peak summer demand.
Total belly storage last month was 86.4 million lbs, a 6
million lbs rise from the end of December and 50 million lbs
more than a year earlier.
Pork bellies are expected to be in short supply during the
summer when they hit their highest price, said University of
Missouri economist Ron Plain. The data may reflect someone's
decision to store bellies in anticipation of potential profits
later as supplies tighten during that period, he added.
Hogs typically are less available during the summer when
extreme heat slows down weight gains and interfere with
The outbreak of the Porcine Epidemic Diarrhea virus (PEDv),
which is fatal to baby pigs, is expected to shrink hog numbers
even more, beginning in the spring of 2013 through the remainder
of the year.
So far, at least 4 million pigs have died from the disease,
National Pork Producers Council chief veterinarian Liz Wagstrom
said at USDA's Outlook Conference in Washington, D.C.
Allendale Inc chief strategist Rich Nelson said: "People are
suggesting that wholesalers are building pork stocks in
perpetration for tight supplies ahead. I would throw in the PEDv
issue as an secondary note."
He cited pork export disputes between the United States and
China as a potential reason for the buildup in pork stocks last
"Chinese hog farms flipped over to net losses in December,
and there is a very strong correlation between their hog prices
and when they import from the United States," Nelson added.
(Editing by Andre Grenon)