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US importers bidding for beef
16 June 2016
Lean beef prices continued moving higher this week in the US imported beef market, largely due to supply issues, according to this week’s report from the Steiner Consulting Group. While Australian beef is still relatively readily available, New Zealand cattle slaughter is reportedly well into its seasonal decline. End users are looking to ensure they have sufficient stocks to get through the US summer. As a result, the price spread between domestic and imported lean beef continues to narrow, with speculation as to when, rather than if, imported beef will trade at a premium to domestic US beef in the next couple of months.
If imported beef does trade dearer than domestic at some point, it is better for the Australian industry that it is due to imported prices continuing to climb, rather than US prices falling. Based on normal seasonal patterns, this is the more likely case, at least in the short term, as US beef prices tend to start falling in late summer/early autumn, as cow culls begin. In addition, there is little prospect of imported supplies lifting in the short term.
This week, the indicative imported 90CL cow beef price rose 3US¢, to 202US¢/lb CIF (up 10.6A¢, to 603.4A¢/kg CIF). The customs-cleared price in the Steiner report was 209US¢, compared with domestic 90CL beef trading for 218US¢/lb.
Halfway through June, Australian beef exports to the US had reached 12,355 tonnes swt, suggesting the monthly total will be well down on May shipments, despite a large global export volume of 50,960 tonnes swt over the same period.
