Total Frozen Pork stocks expanded during September to 642 million pounds, gaining more than 33 million pounds for the previous month. Given that the domestic Hog/Pork sector is now are running at slaughter capacity, Hog and Wholesale Pork prices are expected to be under strong downside pressure due of burdensome Pork output. We expect firms executing freezer programs will likely reduced their bids for buying products to build freezer programs forcing more to the domestic and export markets.
During September Frozen Ham stocks expanded relative to the previous month but are still below a year ago record levels. Given the prospects for expanded Pork Output in coming months, we expect this will keep a lid on Wholesale Ham, Pork Bellies and Pork Rib prices.
During September, Pork Belly stocks liquidated nearly 7 million pounds and help to explain why Wholesale Pork Belly prices are so unstable in recent months when coupled with burdensome fresh Pork output levels. We expect Pork Belly stocks will begin to expand in coming months as fresh Belly output exceeds Bacon demand.
Frozen Boneless Beef Stocks expanded during September and are above a year ago levels. The U.S. continues to be a NET BEEF IMPORTER. We are surprised how fast Mexico is building Beef Exports into the U.S. market as they build their Cattle Feedlot Sector. Mexico is reducing Stocker and Feeder Cattle exports into the U.S., Mexico now has shifted toward shipping higher valued middle meat cuts to capture value added from their Cattle/Beef sector. The sharp falloff for the Mexican currency vs the US$ also helps them support expanding Beef exports into the U.S. market. About 10 to 12 years ago, Mexico sent management people to work for major U.S. Fed Cattle Packers to learn the business and have returned to Mexico to build Cattle Feedlots and Fed Cattle Packing capacity.
During September freezer Total Ham stocks expanded as expected but is anticipated to liquidate sharply through December likely to yearly lows. Give the present very large Pork production rate, this will likely keep a lid on Wholesale Ham prices in coming months and into the fall. Historically, the Pork Trade usually liquidates 100 to 150 million pounds of Ham Stocks from the end of September until the end of December as Ham production to fill the year-end of the year holiday Ham demands and for exports.
Pork Bellies stocks declined during September but are still holding at rather elevated levels, this is seen as BEARISH for Belly prices.
Frozen Boneless Beef Stocks expanded more sharply during September than usual this year. Apparently, domestic Boneless supplies, mostly Beef Trimmings, are burdensome with easing prices. The U.S. continues to be Net Beef Importer; however, Beef Imports are expanding from Mexico and Canada but shrinking from Australia and New Zealand, our historical Beef Processing material suppliers. The very high Beef prices in recent years likely have restricted overall Beef demand.
Total Turkey stocks continue building seasonally but have returned to historical longer-term average levels following the bird flu outbreak. However, Turkey exports are still below levels exported prior to the outbreak of the Bird Flu.