* Feb beef inventories hit 4-year low
By Theopolis Waters
CHICAGO, March 21 The amount of pork in U.S.
cold storage warehouses in February reached a record high for a
third straight month, according to the U.S. Department of
Agriculture's monthly cold storage report issued on Friday.
Friday's USDA report showed February total pork inventories
at 653.8 million lbs, topping February 2013's record of 633.4
Analysts attributed last month's bloated stocks partly to
processors and retailers salting away pork to avoid a potential
supply crunch during the spring and summer peak barbecue
seasons, especially if production declines as a deadly pig virus
sweeps through U.S. farms.
The disease is fatal to baby pigs and has already shrunk the
number of available market-ready hogs, pushing those prices and
costs for wholesale pork to record highs.
"End users and processors were stocking up on supplies ahead
of the expected deficit in production due to the virus," said
Allendale Inc chief strategist Rich Nelson, citing the Porcine
Epidemic Diarrhea virus, known as PEDv.
Dan Vaught, an economist with Doane Advisory Services, said
hog and pork prices are vulnerable to a "substantial reversal"
if the majority of those buying hogs and pork now, as a hedge
against a potential summer supply shortfall, have purchased all
Since being detected in the United States in May 2013, PEDv
has been confirmed on more than 4,700 farms in 27 states,
according to USDA's National Animal Health Laboratory Network.
There is no official count regarding the number of pigs that
died from the disease. But some economists estimated losses of
at least 4 million hogs with the most severe impact on
production expected this summer. The country's hog herd stands
at 65.9 million head.
All eyes will be on USDA's quarterly hog report on March 28.
The data should provide an official account of hog production
over the past 3 months and what is expected this summer.
Analysts said most of last month's pork stock increase was
due to the storage of pork bellies, which are processed into
bacon, and of hams.
Ham storage rises in preparation for the Easter holiday. And
pork bellies are put on ice for months ahead of the summer when
bacon-lettuce-tomato sandwiches are popular.
Total belly storage last month was 88.3 million lbs, a 1.1
million lbs increase from the end of January and 45.3 million
lbs more than a year earlier.
In February, ham stocks totaled 117.2 million lbs, up 11.0
million from the month before and a 6.4-million lbs gain verses
a year ago.
BEEF STOCKS DOWN WITH SUPPLIES
Friday's government data showed February beef inventories
totaled 407.1 million lbs, down 22.2 million from January and
82.9 lbs lower than in February 2013. Last month's beef stocks
were the smallest for the month since 405.5 million in 2010.
Last month, cattle in the U.S. Plains suffered through harsh
weather that disrupted transportation of livestock to market and
slowed down animal weight gains.
Market-ready cattle were already scarce after years of
drought hurt crops, trimming the herd to the lowest in 63 years
at 87.730 million head. Tight cattle numbers last month fueled
record-high prices for cattle as well as costs for beef at the
wholesale and retail levels.
Diminished production in February and fewer numbers of
cattle placed in feedlots last summer through early autumn
resulted in the continued drawdown in beef stocks, said Nelson.