USDA reports drop in nationwide beef, pork stockpiles in July, suggesting firm consumer demand.
Nationwide beef stockpiles totaled 510.8 million lbs. at the end of July, down 6 million lbs., or 1.2%, from the end of June but up 110 million lbs., or 27%, from the same date a year earlier, according to USDA's monthly Cold Storage report today.
While beef supplies were up sharply year-over-year, the 6.0 million-lb. monthly drop contrasts with an average increase of 22.2 million lbs. the previous five years. Given diminished beef production (due to one less workday than in July 2021) during July, this result isn’t surprising, and strongly suggests consumer beef demand improved significantly last month, a bullish development for cattle futures.
U.S. pork stocks at the end of July totaled 530.1 million lbs., down 8.6 million lbs. for the month and exceeding the five-year average of a 4.2 million-lb. reduction. End-July supplies were up 88.4 million lbs., or 20%, from a year earlier.
Given the concurrent drop in beef stocks, the draw-down reinforces ideas that a recent flattening-out in retail meat price, though still historically high, have encouraged consumers. Consumers may also be eating out less and dining more at home.
Today's Cold Storage numbers could support cattle and hog futures at Tuesday’s opening.
