US market for imported beef resumes its decline

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Beef prices in the US import market were much lower this week in US$ terms, and accentuated in local terms by the appreciating A$ in recent days. This week’s report for MLA from the Steiner Consulting Group noted lower prices for trimmings and some whole cuts, from the lean through to the fattier end of the spectrum. The 90CL cow beef indicator had one of the largest falls listed this week, dropping 8.5US¢, to 187US¢/lb CIF (down 15.8A¢, to 544A¢/kg CIF).

There were a few main features emerging in the market over the last week that pulled imported beef prices down:

• First was the seasonal jump in the NZ cow kill, which was estimated to be close to 40,000 head per week through mid-March and will likely peak at around 50,000 head per week in May. This will result in a much larger amount of lean beef on the market over the next two months.
• Second, the drop in US cattle futures, which suggests finished cattle will be cheaper, allowing US domestic packers to offer beef at lower rates.
• Third, the ongoing discount that pork and poultry are being sold for relative to beef – recent wholesale beef price increases put pressure on margins that end-users appear to be unable to maintain.

The USDA Cold Storage report for February, which appears more positive for beef prices moving into the US summer, was also recently released, a summary of which is available here.