US imported and domestic beef prices continue to rally

US imported beef prices experienced a sharp increase this week, as a result of the ongoing supply constraints in the spot market and higher prices for US domestic product.

In the weekly update commissioned by MLA, the Steiner Consulting Group reported that the imported 90CL beef indicator increased 2.5US¢ from week-ago levels, to 210.5US¢/lb CIF (up 8A¢, to 611.05A¢/kg CIF and up 41.25A¢ year-on-year).

While seasonal demand typically drives domestic beef prices higher during the spring, prices have reportedly increased at a much faster pace than the normal seasonal trend. This is despite larger cow slaughter numbers and Steiner Consulting Group outline the two driving factors. Firstly, lower beef prices across the retail and foodservice sectors have encouraged increased consumption. Secondly, end users appear increasingly concerned about the rate of price inflation – which can potentially drive more aggressive bids from end users and push domestic prices higher.

Steiner Consulting Group reports that many end users are struggling to cover their requirements. A large proportion of US imported beef has been going to the larger end users, creating even further competition for product. Shipments from Australia remain limited and, with lower than anticipated cow slaughter in New Zealand as a result of abundant rainfall, Steiner Consulting Group estimates March shipments from Australia to be 23% lower year-on-year and for New Zealand shipments to be similar. The report suggests that a decline in New Zealand dairy prices may see more grinding beef become available over the coming months.