Big pork, poultry competition seen for beef

USDA's Cold Storage report on meat supplies in the locker shows record pork supply of 657.1 million pounds as of March 31, the largest pork supply on record. This tops the 605.72 million pounds in storage the month before, showing a definite upward trend, and the previous record, 597 million pounds in April, 1999. Coupled with the record supplies of live hogs that will eventually be slaughtered, lower pork prices and heavy available volumes may swamp beef demand, analysts said.

Chicken and turkey also were plentiful. The report showed 1.22 billion pounds of the two meats as of March 31, up 28% from a year earlier. The larger supplies followed increased chicken and pork production in 2007 and early 2008, as producers reacted to profitable prices.

Poultry and pork expansion is much quicker than beef, and contraction in reaction to poor prices can also happen more quickly.

Beef supplies were down with the March 31 supply of 424.1 million pounds, compared to 427.2 million pounds a year ago.

With all this meat available, returns to producers could be lower, but prices to consumers will stay high, at least for the immediate future. Grocers will take advantage of the lower wholesale prices to fatten profits by leaving retail prices the same, as long as they can.

Cattle, chicken and hog producers are all being pinched by high feed and fuel costs. If combined with lower prices received for their animals due to such heavy supplies, it could be a lean year on the farm.