US dollar decline supports imported beef prices

US imported beef prices moved higher this week, as a result of limited availability from Australia and New Zealand. Furthermore, a decline in the US dollar in recent weeks has also been a supporting factor in a lift for US imported beef prices.

The imported 90CL beef indicator edged 1.5US¢ higher from the previous week, to 203US¢/lb CIF (up 2A¢, to 568.70.5A¢/kg CIF).

New Zealand bull meat supplies are expected to follow the usual seasonal trend and increase during January and February. However, given the increase in bull slaughter throughout December there is a possibility of supplies declining earlier than normal.  Australian offerings remain limited and bids from US end users continue to fall short of Australian packers asking prices.

US beef production is forecast to increase 6% in 2018 according to the latest USDA projections, poultry and pork production are projected to rise by 2% and 5%, respectively. US beef demand will need to be even stronger than that of 2017 in order to avoid significant downward pressure on beef prices.

Highlights from the week ending 12^th January:

• CME fed cattle futures have declined as much as 5% since the start of the year following lower than expected prices in the cash market and continuing worries that supply increases will require lower prices and not allow cattle to back up in feedlots.

• The latest USDA survey indicated there were 8% more cattle on feed at the end of November.

• Steer weights are currently near year ago levels and will serve as an indication of how current feedlots will be in the next three months.

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