US imported beef continues to trade at a premium

US imported beef prices continue to hold firm, as a result of limited spot supplies but also higher offering prices from overseas packers. Through the first six weeks of the year, imported grinding beef prices have continued to trade at a premium to domestic beef.

In the weekly update commissioned by MLA, the Steiner Consulting Group reported that the imported 90CL beef indicator increased 0.5US¢ from week-ago levels, to 203US¢/lb CIF (down 1A¢, to 585.54A¢/kg CIF).

Shipments from Australia in January declined 31% year-on-year, to 11,614 tonnes shipped weight, while New Zealand slaughter is down 13% so far this marketing year – both contributing to the shortage of lean and extra lean grinding beef in the US. Mexico has been the only supplier in recent weeks to increase shipments. Steiner Consulting Group comments that while it is unlikely Mexico poses any threat to Australia in terms of frozen grinding beef, they can provide competition for chilled cuts, due to the price differential Mexican products trade at over US domestic product.

Steiner Consulting Group reports that packers in New Zealand are monitoring slaughter progress closely before offering more beef to the market, as a number of packers already have a significant volume of product on their books for delivery in February and March. While New Zealand slaughter levels are tracking lower this marketing year, Steiner Consulting Group anticipates more product to become available in March and April as a consequence of cattle being held back at the start of the season due to ample feed supplies and softer prices late last year. Steiner Consulting Group also notes that drier conditions in New Zealand at the moment are likely to increase in slaughter numbers in the short term.