Very slow November for beef to the US

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Australian beef exports to the US reached just 13,163 tonnes shipped weight (swt) during November – the lowest November volume since 2010 (Department of Agriculture and Water Resources). The large drop in shipments compared with last year and most of 2015 is mainly due to the US quota for Australian beef (418,214 tonnes swt) reaching its limit.

At the same time, the US beef market has dropped sharply in the last two months, meaning there is less of a premium for Australian companies to export to the US rather than other markets. The US market for imported beef is still getting cheaper, but appears to have slowed its decline in the last three weeks. The indicative imported 90CL cow beef price, reported by the Steiner Consulting Group, was 2.5US¢ lower this week, at 187US¢/lb CIF (down 10.8A¢, to 567.9A¢/kg CIF).

Most of the decline in beef exports to the US during November was in manufacturing beef – logical given the majority of trade is in this category. Manufacturing beef was down 72%, to 7,392 tonnes swt.

Other large declines in trade were recorded in:

• topside/inside – down 53%, to 1,340 tonnes swt
• silverside/outside – down 56%, to 881 tonnes swt
• knuckle – down 82%, to 316 tonnes swt
• brisket – down 87%, to 89 tonnes swt
• shin/shank – down 93%, to 38 tonnes swt

Smaller drops were noted in:

• thin flank – down 32%, to 1,471 tonnes swt
• rump – down 1%, to 465 tonnes swt
• striploin – down 20%, to 229 tonnes swt
• cube roll/rib eye roll – down 23%, to 214 tonnes swt

While the higher value loin cuts are smaller in value in general, the rate of decline was much lower than most of the cheaper cuts, indicating exporters are still seeing value in high quality product to the US before the quota finished completely.

Shipments to clear US Customs under the 2016 quota should begin soon, which is expected to relieve some pressure on Australia’s other export markets, which have taken more product while US demand has been slow.