2.5 Billion Pounds of Meat Piles Up in U.S. as Production Grows, Exports Slow [View all]

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2.5 Billion Pounds of Meat Piles Up in U.S. as Production Grows, Exports Slow

Profits, prices are threatened as record amounts of red meat and poultry fill U.S. warehouses

By Jacob Bunge

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July 22, 2018 10:00 a.m. ET

Meat is piling up in U.S. cold-storage warehouses, fueled by a surge in supplies and trade disputes that are eroding demand. ... Federal data, coming as early as Monday, are expected to show a record level of beef, pork, poultry and turkey being stockpiled in U.S. facilities, rising above 2.5 billion pounds, agricultural analysts said.

U.S. consumers’ appetite for meat is growing, but not fast enough to keep up with record production of hogs and chickens. That leaves the U.S. meat industry increasingly reliant on exports, but Mexico and China—among the largest foreign buyers of U.S. meat—have both set tariffs on U.S. pork products in response to U.S. tariffs on steel, aluminum and other goods. U.S. hams, chops and livers have become sharply more expensive in those markets, which is starting to slow sales, industry officials said.

The meat industry’s growing production already is filling the specialized warehouses built to store meat and other goods. “We are packed full,” said Joe Rumsey, president of Arkansas-based Zero Mountain Inc. The company’s five storage facilities serve as way stations for turkeys and chicken strips between processors and retailers, holding around 250 million pounds of products on any given day.

Growing meat stockpiles may bring down prices for meat-hungry U.S. consumers, along with restaurants and retailers. But slowing overseas sales and rising domestic stockpiles threaten profit for meat processors and prices for livestock and poultry producers. Since the end of May, prices of lean hog futures at the Chicago Mercantile Exchange have dropped 14%.
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—Benjamin Parkin contributed to this article.

Write to Jacob Bunge at [e-mail]

Appeared in the July 23, 2018, print edition as 'U.S. Meat Stockpiles Surge As Tariffs Eat Into Exports.'