US imported prices gain traction

Prices on the US imported beef market continued to push higher this week, driven by very tight overseas supplies on the spot market, stronger demand from importers trying to cover existing orders, and rising prices for domestic grinding beef.

In the weekly update commissioned by MLA, the Steiner Consulting Group reports that the imported 90CL beef indicator lifted 0.5US¢ from week-ago levels, to 199US¢/lb CIF (up 0.3A¢, to 575.4A¢/kg CIF).

Steiner Consulting note that, while the turnaround in imported prices appears quite sudden, the upwards movement is in line with trends seen in previous years when imported beef supplies have been tight. In fact, the current spread between imported and domestic beef prices is a 16¢ premium for imported product – the highest level in the last five years.

According to Steiner Consulting, demand is particularly strong for lean and extra lean grinding beef – as Australian shipments have been tracking well-below year-ago levels, and the majority of imports from Australia are 90% lean boneless beef.  

Supplies of 90% lean boneless beef in the US come from two different sources – imports and domestic cull cows. While imported beef volumes are down year-on-year, the Steiner Consulting Group’s Daily Livestock Report informs that US cull cow slaughter is 4.3% higher for the year-to-date, compared to 2015. While not all US cull cow beef is sold as 90% boneless beef, the majority is, which has offset the decline in imported offerings.