US end users face increased competition

The availability of imported grinding beef in the US market remains tight, despite elevated slaughter in Australia and New Zealand. The influence of China, in relation to the global trade of meat protein, has seen the volume of product destined for China gain further momentum in 2019. As a result, US end users face heightened competition and higher offers.

The imported 90CL beef indicator lifted 1.5US¢ from the previous week, to 211US¢/lb CIF (up 2A¢ to 655.51¢/kg CIF).

The USDA currently forecasts China beef imports to be up 20% compared to a year ago. However, the market sentiment concludes this figure will likely be considerably higher, with a sizeable shortfall in overall protein supply due to the dramatic spread of African Swine Fever (ASF). China beef imports in January were up by more than 50% year-on-year.

Numbers on feed

US Cattle on feed totals on March 1 were reported at 11.796 million head, up 0.7% from year-ago levels. February was the first month since August with placements above year-ago levels, up 2.2% at 1.857 million head. It was also the largest February placement number since 2000. In the near term, prices are expected to remain in check, given ample front-end supplies in the lead up to the US summer. However, the focus will be on feedlot conditions, due to the recent snowstorm heavily affecting cattle in Colorado, Nebraska and South Dakota. Export demand will also be closely monitored due to the spread of African swine fever in China.

Click here to view the latest US Imported beef market update