US imported beef market edges lower as NZ offerings increase

US imported beef prices moved modestly lower from last week’s levels, underpinned by increased offerings from New Zealand, attributed to the seasonal rise in slaughter.

In the weekly update commissioned by MLA, the Steiner Consulting Group reports that the imported 90CL beef indicator eased 2.5US¢ from week-ago levels, to 196.5US¢/lb CIF (down 10.9A¢, to 562.8A¢/kg CIF), but compared to the same time last year, the indicator is up 7US¢.

Australian beef supplies remain extremely limited, and imported offerings on the spot market are particularly tight. US end users requiring significant volumes are therefore likely to be sourcing requirements from the domestic market or, in order to maintain relationships with regular suppliers, be willing to pay a premium to secure imported product.

In recent weeks much has been noted about the supply situation, but there are also several demand drivers that Steiner Consulting Group report as having a considerable impact on the imported beef market at present. The first is consumer incomes – real per capita disposable income growth has been trending lower over the last three months, compared to last year. Steiner Consulting suggests this may have had a negative impact on demand over the US summer and early autumn, however income growth is expected to pick up in coming months. Secondly, prices for competing proteins (pork and chicken) are expected to remain low for the next 6 months, which will maintain pressure on grinding beef values. Furthermore, grinding beef demand is sensitive to foodservice business in the US. The report suggests that restaurant trends, in relation to foot traffic, were weaker in September compared to the same period last year.