According to official records from the Department of Agriculture, over 2.5 billion pounds of beef, pork, chicken, and turkey are sitting in cold storage units across the country and, as the headline indicates, it's because exports are slowing down or evaporating.
According to cold-storage data released July 23 by the U.S. Department of Agriculture's National Agricultural Statistics Service, poultry supplies hit record levels last month. Frozen chicken supplies were up 2% from May and 10% from the same period last year, while turkey supplies jumped 5% from last month. Beef stocks were up 8% from a year ago, and frozen pork supplies were up slightly from last year.
The Wall Street Journal reported the U.S. meat industry’s specialized warehouses built to store meat and other goods is reaching capacity.
“We are packed full,” Joe Rumsey, president of Arkansas-based Zero Mountain Inc., told The Journal. 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.
The combination of trade risk and expanding meat supplies could result in “one of the biggest corrections we’ve seen in the industry in several years,” said Christine McCracken, protein analyst at Rabobank.
Production of meat in the United States is soaring, but sales are dropping because of Trump's trade war and retaliatory tariffs placed on American meat by Mexico and China.
Foreign trade is the reason why production is (or was) increasing, leading to large stockpiles that are now sitting in storage because there's no market for it.
For Americans, this will probably lead to large sales and lower prices for meat over the next several months leading into the holiday season, but after the supply is sold off production will decrease and domestic prices could end up being higher than they are now to compensate for the loss of exports. So, if your Thanksgiving turkey is a couple dollars cheaper than usual, keep in mind that we're all going to pay for it one way or another. That's the coming "correction" that some industry analysts are now predicting.
Pork farmers are on Trump's short list for a bailout, but beef, chicken, and turkey farmers are not as far as we currently know.