Softer prices for US imported beef

US imported beef prices moved lower this week, as a result of a softer US domestic demand – with end users now looking to see how business develops post Memorial Day holiday. Limited spot availiabity out of Australia continued, while increased offerings from New Zealand packers brought prices modestly lower.

The imported 90CL beef indicator dropped 4US¢ from week-ago levels, to 214.5.5US¢/lb CIF (down 15A¢, to 633.25A¢/kg CIF).

Market dynamics

US end users took a step back this week and turned much of their attention to how the market will progress into the summer. Steiner Consulting Group reported some market participants believe the high price for ground beef will cause retailers to raise prices, softening demand and flowing back to cattle prices. However, ground beef demand looks set to remain strong in the coming weeks with Father’s day (18 June) and July 4^th celebrations supporting beef retail features – albeit neither events are as big a grilling event as Memorial Day.

Beef Supplies

Tight spot availability in the US has been heightened by limited shipments from Australia – for the week ending May 19, Australian cattle slaughter was back 11% year-on-year, at 132,000 head. Overall beef imports are down 10% for the year-to-date – and excluding Canada and Mexico, which come under the NAFTA agreement, imports have declined 18% compared to a year ago.

US Domestic beef supplies are extremely constricted despite slaughter running above year-ago-levels. A drop in fed cattle weights (2-3%) has contributed to an overall decline in fed beef production compared to last year; as a result, supplies of fat trim in the market are particularly constrained.

Click here to view Steiner Consulting US imported beef market weekly update