U.S. pork supplies tightened before coronavirus shut slaughterhouses

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CHICAGO (Reuters) – U.S. supplies of frozen pork fell in March before the coronavirus pandemic forced meat processors to close slaughterhouses, the U.S. Agriculture Department said on Wednesday, setting the stage for inventories to tighten further.

Processors have closed major pork and beef plants following the spread of the new virus among employees, reducing U.S. meat output and causing livestock to back up on farms.

The latest shutdown announcement came earlier on Wednesday, when top meat supplier Tyson Foods Inc said it would close a plant that accounts for about 5% of U.S. pork production. Smithfield Foods, the world’s biggest pork processor, has warned the United States is moving “perilously close to the edge” in supplies for grocers.

Cold-storage facilities held 621.9 million pounds of pork as of March 31, down 27 million pounds from February, according to USDA data.

That exceeded the typical decline of about 11 million pounds for the month over the last five years, said Rich Nelson, chief strategist for broker Allendale. He predicted inventories could drop another 20 million to 40 million pounds in April, when inventories would normally rise about 27 million pounds.

“The plant problems started showing up in the first week in April,” Nelson said.

 

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