Source:  Tom Johnston, MEATINGPLACE.COM, 10/23/09

Decreases in cold storage stocks of beef, poultry and turkey and only a slight increase in pork supplies indicate a positive trend for prices across all proteins, analysts said Friday after USDA released its monthly Cold Storage Report.

Pork supplies in cold storage as of Sept. 30, estimated at 531.9 million pounds, still are nearly 15 percent higher than the five-year average. But they rose only 1.1 percent over September of 2008, marking the lowest year-on-year increase since May. September pork supplies increased only 0.3 percent from August, bucking the usual seasonal surge.

"This implies good movement to domestic and export markets for [September] and some pent up demand going into Q4," analysts Steve Meyer and Len Steiner wrote in their Daily Livestock Report.

Chicken supplies, estimated at 636.7 million pounds, fell 16 percent from last year and 13.4 percent below the five-year average. Chicken inventories in September also fell 1.5 percent from August, which J.P. Morgan analyst Ken Goldman noted as a rare event given the usual rise between those two months. Legs and quarters, he noted, were down 59 percent and 16 percent, respectively, on a year-on-year basis.

Meyer and Steiner said, "The reduction in chicken stocks should be positive not just for broiler prices but the entire meat complex."

Turkey in cold storage, at 615.1 million pounds, also fell year-on-year for the first time since July of 2007, according to Goldman, who wrote in a note to investors that the trend is "a positive indicator for an industry that has lost a lot of money."

Beef stocks, estimated at 434.1 million pounds, decreased 4.5 percent from September last year and were 6.8 percent lower than the five year average.

"End users are going into the holiday season with less inventory than usual, clearly a response to the much lower than expected cattle prices for Q4," said Meyer and Steiner.

For more stories, go to www.meatingplace.com.