Imported beef prices getting closer to domestic market in the US
05 May 2016
The weekly survey of US beef importers conducted by the Steiner Consulting Group for MLA indicated the price of imported lean beef continued to rise this week. Slow shipments from Australia, and some end users finding themselves looking for more product than they had expected were the key reasons noted for the prices being pushed higher, while the A$ slipping in the last couple of days will assist returns to Australian exporters.
While Australian cattle slaughter had started to increase through April, as widespread dry conditions forced producers into making selling decisions, good rain across south-eastern Australia last weekend (with more forecast in the next week) could slow those numbers again.
In addition to the factors mentioned above, the high volatility (and recent collapse) in the fat trim market in the US is also providing support for the lean beef market – as the cheap fat trim reduces the overall cost of ground beef mixes.
This week, the indicative imported 90CL cow beef indicator rose a further 5US¢, to 204US¢/lb CIF (up 21.7A¢, to 594.7A¢/kg CIF).
The US cattle market is not expected to move higher in the next few months, with reports of adequate supplies of cattle in feedlots, despite becoming more current in recent weeks. This will keep downward pressure on US domestic beef prices, allowing imported beef to get closer, and perhaps even trade at a premium, to domestic beef later this year.
