For the week (average of daily closing prices) the December Live Cattle contract was $109.70 per cwt., up $2.54 from the prior weekly average. That was the highest since the week ending August 26th of this year and was more than $11.50 per cwt. above the contract low (established on the week ending October 14th).

Turning to the February Live Cattle contract, the weekly average price was $110.69 per cwt., the highest since August 19th.

The December Hog contract averaged $49.97 per cwt. last week; that was up $2.71 week-over-week and the highest for any week since October 14th. At $56.16 per cwt., the February contract also was higher for the week (increasing $2.18 per cwt.) and posted its highest level since the week ending September 9th.

Last Tuesday (November 22nd) USDA’s National Agricultural Statistics Service (NASS) released their monthly Cold Storage report which provided data as of the end of October.

Data are collected from approximately 800 public and private storage warehouses. Data include food products normally stored for 30 days or more in artificially cooled environments.

Excluded are facilities where frozen inventories normally turned over more than once a month. All commodities are reported regardless of ownership (manufacturer, wholesaler, retailer, US government) or product origin (domestic or foreign).

Analytically, frozen stocks of meat and poultry are sometimes an important market factor, especially of individual items (like ham and pork bellies). However, the majority of red meat items are sold fresh as is chicken.

Frozen stocks of meat and poultry tend to be rather seasonal and can build up year-over-year due to several factors, including: increased imports, to support growing export tonnage, and speculation by processors and wholesalers expecting to receive higher prices in the future.

At the end of October, NASS reported total stocks of frozen chicken were up 1 per cent from the previous month, but importantly down 10 per cent from a year ago. As expected, frozen turkey tonnage was down month-over-month, which provided inventory for holiday sales, but year-over-year stocks increased (up 13 per cent).

Beef tonnage in commercial freezers at the end of October was up 5 per cent for the month and increased 3 per cent year-over-year. As of October 30th, those stocks were record high.

As discussed in prior DLR articles on the Cold Storage report, NASS provides much more detail on the types of poultry and pork items in frozen stocks compared to beef.

Pork tonnage in freezers was down 7 per cent for the month and dropped 1 per cent year-over-year. Those declines were led by ham stocks which were down 3 per cent for the month and fell 23 per cent compared to a year ago. Frozen bellies declined from last month’s level (down 17 per cent), but remained well above 2015’s (increasing 16 per cent year-over-year).