US Imported beef prices continue to edge higher

According to Steiner Consulting Group, market participants appear divided on the short-term direction of the US imported beef market, with prices continuing to edge higher as a result of ongoing supply constraints out of Australia and New Zealand.

Reports suggest that extremely tight spot supplies continue to underpin the market and end users looking for the delivery of product in March are paying a premium to secure product. However, an increasing number of end users are offering resistance at current prices, especially for lean and extra lean grinding beef, taking a ‘wait-and-see’ approach in anticipation of a shift in the short term direction of the market.

In the weekly update commissioned by MLA, the Steiner Consulting Group reported that the imported 90CL beef indicator increased 3US¢ from week-ago levels, to 206US¢/lb CIF (up 6A¢, to 591.69A¢/kg CIF).

Drier weather conditions in both Australia and New Zealand have continued this week, reflected in slaughter levels moving higher as more cattle come onto the market. However, Steiner Consulting Group comments that packers in New Zealand appear in no rush to sell more beef at present, as many have long positions in place through to mid-March.

However, Steiner Consulting Group notes several short-term changes which may stimulate more offers for imported beef, such as the prospect of larger shipments from Brazil, pending final approvals from the USDA, and a shift in exchange rates. The strong Australian dollar has made shipments to the US increasingly challenging, moving 5US¢ higher since the start of the year – currently trading at 77US¢.