Pork stockpiles in the U.S. fell 7.4 percent at the end of October from a year earlier, after farmers reduced the size of their herds to support prices, the government said.
Warehouses held 478.2 million pounds of pork, down from 516.3 million pounds on Oct. 31, 2009, the U.S. Department of Agriculture said today in a report. Inventories rose 13 percent from the end of September.
Pork output last month may have been up about 3 percent from a year earlier, said Rich Nelson, the director of research at Allendale Inc. in McHenry, Illinois. At the start of September, the number of breeding hogs was about 5.77 million, near the smallest size on record.
“We’ve done quite a bit of liquidation on the production side up until the first half of this year,” Nelson said in a telephone interview before the report. “That’s one reason why we have this lower stock issue. We are past the point of the tightest stocks. We’re now starting to build up stocks.”
Supplies were up from a month earlier as exports slowed and the slaughter increased, Nelson said. Pork shipments to overseas customers fell 7.8 percent in September from a year earlier, according to the most-recent USDA data.
“The trade assumes that lower export pace may have been taken into October as well,” Nelson said.
Hog futures for February settlement rose 0.15 cent to 77 cents a pound at 12:52 p.m. on the Chicago Mercantile Exchange. Earlier, the price touched 77.675 cents, a two-month high. The commodity dropped 12 percent last month, while wholesale pork plummeted 17 percent, the biggest monthly decline since August 2002. Still, the most-active contract was up 17 percent this year before today.
As of Oct. 31, stockpiles of pork bellies, which are cured and sliced to make bacon, were down 37 percent from a year earlier at 23.2 million pounds, according to today’s report. Warehouse supplies of ham rose 16 percent to 150.6 million pounds.
Chicken-meat inventories at the end of October were 15 percent larger than a year earlier at 733.5 million pounds, the USDA said. Beef supplies fell 6 percent to 402 million pounds.