U.S. beef and chicken inventories housed in cold storage facilities surge according to a report from agricultural data provider Gro Intelligence.
U.S. beef inventories were 13.9% higher year-over-year in April, 6% above the five-year average and chicken inventories climbed 6.1% compared to April 2019, 13.5% higher than the five-year average.
The report cited restaurant closures and the inability of processing houses to slow production as the reasons.
Beef inventories were drawn down 2.5% from March to 490 million pounds, following seasonal inventory patterns. Inventories typically decline in the spring and summer as slaughterhouses slow production after farmers have cashed in their livestock for seed money to plant summer crops.
The increase in chicken and related products inventories was propelled by a 33% year-over-year increase in chicken breast and breast meat, 37.3% higher than the five-year average. The report noted particular difficulty with chicken processors’ inability to slow production to match weakened demand at the restaurant wholesale level caused by shelter-in-place mandates.
Total chicken and products inventories came in just under one billion pounds. The all-time high of 1.033 billion pounds was set in December 2019.
The rise in protein inventories was noted on temperature-controlled warehouse operator Americold Realty Trust’s (NYSE: COLD) first quarter 2020 earnings call. Americold’s management team said they weren’t seeing a meat scarcity throughout the cold food chain, specifically referencing an abundance of chicken inventory. The increase in meat inventories also aligns with increased demand for new cold storage facilities.
Americold operates 183 temperature-controlled facilities globally.
Through the pandemic, many processing plants have been forced to contend with COVID-19-related stops and starts as well as supply chain and distribution disruptions. Many have had to reconfigure packaging for household consumption at the grocery level instead of larger package quantities customary with restaurant and catering consumption.
April pork inventories of nearly 615 million pounds declined 1.1% year-over-year, 0.3% lower than March. The report cited “heightened exports in 2019 and early 2020” as the reason for the drawdown. April pork stocks were 3.5% below the five-year average.