US frozen pork inventories plunged to a near-decade low in July, reported Reuters, citing a new USDA report.
The decline coincides with China importing a record amount of pork in July following an outbreak of the African swine fever that decimated the country’s herd. Also, US meatpacking plants were coming back online following virus-related shutdowns.
USDA reported 458.902 million pounds of pork were in US cold-storage facilities for the month, down from 460.173 million in June and 611.692 million a year earlier. The July figure is the lowest monthly inventory of pork ribs, loins, and hams since July 2011.
The combination of increasing Chinese imports, meatpacking plant disruptions, and summertime grilling demand has left pork in low supply as production levels remain pressured and shortages may persist of specific cuts:
“At this point, we are still playing from behind,” said Matthew Wiegand, commodity broker for FuturesOne. “It will take some time for a lot of your different cuts, especially with the elevated export pace that we have seen.”
The virus pandemic disrupted major US food supply chain networks. We noted in April the shutdown of meat-processing plants resulted in a nationwide pork shortage sending prices sky-high.
Pork bellies, a boneless cut of fatty meat from the belly of a pig, used to make bacon, sustained a 20% drop in supplies in July, the USDA report showed.
At the time of the shutdowns, meatpacking companies were heavily criticized for increasing exports of pork to China despite domestic food supply chain woes.
Rising food prices have been a shock to low-income households, barely surviving the virus-induced recession. The Federal Reserve has made a significant commitment to ramp up inflation as the cost of pork and many other food products surges this year.
Fed Chairman Jerome Powell will speak Thursday during a virtual session of the Fed’s annual Jackson Hole, Wyoming, conference, where he is expected to announce policy measures that will allow inflation to run hot.
Letting inflation run hot as food prices soar is bad news for the tens of millions of broke, jobless Americans who still haven’t received round two of Trump stimulus checks.