Our opinion is that markets will view the survey as supportive of beef and pork prices going into the spring. As for chicken, there was more of the same and we think it was largely neutral.

Below are some of the highlights:

Total supplies of beef, pork, chicken and turkey in cold storage at the end of February were 2.268 billion pounds, 1.6 per cent higher than a year ago.

Inventories increased 0.5 per cent in February when on average the month/month increase for this month is about 3 per cent.

Meat protein production continues to increase and the fact that inventories have not increased significantly implies that product is moving and demand is generally good, both in domestic and export channels. The most significant drawdown in stocks was for boneless beef.

A decline in beef imports as well as the liquidation (this is our opinion) of frozen fat trim stocks in January likely helped reduce overall beef inventories.

The challenge in properly analysing beef inventories is that USDA does not provide much of breakdown of beef stocks.

We do not even know whether we are talking about domestic or imported beef. Maybe at some point this is something USDA will consider doing. After all our Canadian counterparts already provide this kind of detail.

The inventory of boneless beef in cold storage at the end of February was 449.2 million pounds, 0.3 per cent lower than a year ago. Inventories declined 6 per cent from the previous month when normally they decline just 1 per cent.

Total pork in cold storage was 628.4 million pounds, 8.6 per cent lower than a year ago and now 0.9 per cent lower than the five year average.

Last year cold storage stocks rose sharply in February, March and April as markets had difficulty absorbing the rapid increase in pork supplies.

Weekly hog slaughter for the period Dec-Feb was estimated to be 2.9 per cent higher than the same period a year ago while pork production was estimated to be up 2.1 per cent over last year. And yet overall pork inventories have been drifting lower.

The biggest increase in pork stocks was for ribs, up 35 per cent from a year ago. End users have been very aggressive in increasing rib inventories in order to hedge some of their needs for the spring.

The inventory of pork trim continues to be light, down 41 per cent from a year ago and 31 per cent lower than the five year average. This should be supportive of the market in the spring when demand for hot dogs and sausages increases while hog slaughter drifts lower.

Ham inventories are far from burdensome at 115.8 million pounds, 9.3 per cent lower than a year ago and 1.4 per cent lower than the five year average.

Total chicken inventories at the end of February were 810.4 million pounds, 10.7 per cent higher than a year ago and 22.7 per cent higher than the five year average.

If there was a positive in the chicken numbers is that overall stocks declined 1.6 per cent from the previous month, in line with the normal drawdown in supplies, hence our view that the results were largely neutral for the chicken market.

While the large inventories may cap the upside for chicken prices, it appears that at this point markets are doing a be?er job of absorbing the steady increases in chicken production.