US imported beef market continues to ease

US imported beef prices edged modestly lower from last week’s levels, underpinned by increasing offerings from New Zealand. Packers in New Zealand appear intent on generating additional business before the holiday season commences.

In the weekly update commissioned by MLA, the Steiner Consulting Group reports that the imported 90CL beef indicator eased 0.5US¢ from week-ago levels, to 196US¢/lb CIF (up 6A¢, to 573A¢/kg CIF), but compared to the same time last year, the indicator is up 6US¢.

Offerings from New Zealand continue to increase, characteristic for this time of year. In October, New Zealand bull slaughter was running at 10-11,000 head per week, with Steiner Consulting expecting these levels to double by mid-December – dependent on seasonal conditions.

Steiner Consulting Group reports the development of a two tier market, which is fairly typical towards the end of the year. Supplies of grinding beef available before year end remain limited and therefore command a premium. In contrast, product that will be available in January is trading at a lower price, with end users asking for considerable discounts in order to take a position that far out. Nonetheless, US end users are largely focusing on spot loads to cover their short term requirements and US domestic grinding beef supplies are helping to offset reduced import volumes.

US cow and bull slaughter for the week ending November 12 tracked around 5% higher than year ago levels, whilst beef cow slaughter for the last three months was 22% higher than the same period last year – albeit off a low base. 

Furthermore, US fed steer prices continue to weaken, with recent USDA forecasts also revising prices lower for 2017. Steiner Consulting suggest several factors impacting the fed cattle market, including a short term inelastic processing capacity and ongoing pressure from competing proteins (pork and chicken) on the value of lower priced beef cuts.