Cold storage, especially for red meat and poultry, is an important part of the protein supply chain. Meat in cold storage comes from a variety of sources and is used in domestic and global markets. USDA’s National Agricultural Statistics Service (NASS) Releases Cold Warehouse Survey Near 22n/a of each month. As of May 31, the USDA’s June survey estimates red meat in storage at 1.087 billion pounds, down slightly from April but 20% higher than the same time last year last. This Market Intel will address common questions surrounding the USDA Cold Storage Survey and what the USDA Cold Storage Survey means for livestock producers and ranchers.
What is it and how does it work?
The USDA Cold Warehouse Survey measures reserve food stocks held in commercial and public warehouses. Specifically, the survey collects data from more than 800 commercial and public cold stores in 48 states that store produce at or below 50 degrees Fahrenheit for 30 days or more. The survey, sent around the 24e of each month, collects data on approximately 150 items, including dairy products, fruits, nuts, vegetables, poultry and red meat. All stocks in this survey represent “end of month” figures. This means that the June report represents cold room inventory as of May 31. Any late survey responses are included in the following month’s report. This means that the April data in the June report may differ from the May report due to additional information.
The survey does not include inventory held in space serviced by wholesalers, wholesalers, distributors, chain stores, individual locker racks, branches of meatpackers or frozen food processors whose entire inventory is renewed more than once a month. NASS does not distinguish between products owned by a manufacturer, producer, wholesaler, retailer, or government entity, or between domestic and imported products.
What does it mean?
Data from this survey can be used for a variety of purposes by consumers, commodity producers, economists and analysts. One way to use it is to analyze historical supply and demand for domestic and global markets.
The USDA defines frozen red meat as beef, pork, veal, lamb, and mutton and “other” red meats. In the May survey, which reports data from the previous month, the USDA estimated 1.089 billion pounds. of red meat in stock, 16% more than in April 2021 and 4% more than the previous month. Total frozen red meat inventory then declined through May, but only slightly. Additionally, frozen beef inventories, part of red meat inventories, fell 2% in May, but were still 25% higher than the same period last year. Similarly, pork inventories rose 2% in May and are estimated to be 17% higher than the same period last year.
Figure 1 illustrates the monthly cold storage totals for beef, pork and red meat between January 1, 2018 and May 1, 2022. Figure 1 also illustrates a decline in red meat at the start of the COVID pandemic -19 and the 2022 increase. During the pandemic, many meat processing plants were closed. When this happened, persistent consumer demand began to eat into cold-stored meat as a substitute for more recently processed products.
What caused the recovery of the number of cold rooms in 2022?
Many factors can contribute to the increase in stocks between 2021 and 2022. A main indicator is the consumption of red meat. Retail prices for red meat and poultry have increased in 2022. The USDA-Economic Research Service (ERS) Consumer Price Index forecast indicates that the average price paid for a basket of meat representative increased by 12.3% between May 2021 and May 2022. As a result, the per capita disappearance of red meat and poultry is expected to decline in 2022 as consumers opt for cheaper in-store options. The impact of Americans consuming less meat and poultry is an increase in cold storage meat.
A second factor is the global market. Historically, China has been a major importer of American beef and pork. In fact, China was the third-largest importer of US beef in 2021 and is on track to increase its beef imports for 2022. In recent years, however, China has been importing considerably less pork. The value of pork imported by China has fallen by 26% between 2020 and 2021, while the value of U.S. pork imported into Mexico has simultaneously increased by 45%. This took China from the top pork importer in 2020 to number four by the end of 2021.
During the pandemic, China has increased its imports of American beef and pork. This is partly because China’s pig population has been damaged by African swine fever. Due to increased Chinese imports, to compensate for their reduced domestic production, the number of American cold storage warehouses has fallen. More recently, China has been able to rebuild its pig population and now imports less pork while remaining an active importer of US beef. Declining Chinese pork imports into the United States resulted in less pork being removed from cold storage, allowing the volume stored to steadily recover.
Summary and conclusions
There is a combination of global and national factors that can contribute to the movement of red meat and poultry through cold storage. When factories closed during the pandemic, more frozen products were consumed because live animals could not be easily processed. In China, a major importer of meat and poultry from the United States, COVID-19 and African swine fever have resulted in lower than normal domestic pork supplies, putting pressure on international stocks. pork and contributed to lower U.S. cold storage rates between mid-2020 and early 2021.
So far in 2022, cold stores have increased. Processors have been able to stay open for business more consistently than during the pandemic. Consumers are faced with rising prices at the grocery store and, as a result, are buying less meat. Additionally, China has rebuilt its pig population and is importing less American pork.
All of these factors contribute to the complexity of supply and demand in meat and poultry markets. Fortunately, the USDA Cold Storage survey is a tool that can illustrate market trends. Farmers and ranchers can use cold storage inventory numbers to make better decisions about the demand for their product.