US Imported beef prices continue upward trajectory

Low New Zealand (NZ) and Australian cattle slaughter have kept the US imported grinding beef market buoyant throughout April.

Imported 90CL prices edged 1¢ higher this week, to 614A¢/kg CIF, continuing the general upward trajectory since the beginning of 2017.

Interestingly, while the market has been rising, imported 90CL prices remain below the extraordinary highs of 2015, when there were periods that they exceeded 700A¢/kg CIF.

Looking forward, three factors are likely to underpin grinding beef prices over the coming months.

1. The Steiner Consulting Group reports that good moisture conditions and higher calf prices could reduce US domestic cow slaughter in May and June, meaning that when combined with the Australian and NZ situation over the coming months, it is likely the tight supply situation will remain.
2. US retailers and foodservice operators are in full swing, preparing for the usual seasonal demand improvement that comes with warmer weather.
3. On the back of consumer disposable income growth returning to pre-recession levels, US consumer confidence is at the highest level it has been in almost a decade.

For more details on Australian beef supply and market expectations for 2017, please view the recently released April Update to the cattle projections, or for more details on the imported US beef market, view Steiner Consulting Groups weekly update, commissioned by MLA.