US Imported beef prices higher once again

US imported beef prices continued to move higher this week as a result of the ongoing supply constraints out of Australia and New Zealand but further supported by seasonally strong demand.

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 213.5US¢/lb CIF (up 0.3A¢, to 611.03A¢/kg CIF).

As reported in last week’s update, beef prices typically move higher at this time of year due to seasonal trends, however Steiner Consulting Group comment that a number of market participants have been surprised at the pace in which prices have increased this year. Domestic US supplies, particularly grinding beef, are tracking higher year-on-year as dry conditions and higher prices have seen more cows brought to market. Steiner Consulting Group reports that cow and bull slaughter for the week ending 18^th March was up an estimated 6% year-on-year, totaling 120,000 head.

Imported beef supplies remain extremely tight, due to the limited availability out of Australia and reduced New Zealand slaughter, which is tracking considerably below year-ago levels. New Zealand packers are reportedly having difficulty filling orders already in place and are therefore reluctant to take more cover for May and early June. Steiner Consulting Group estimates March shipments from Australia to be 21% lower year-on-year. Imported grinding beef prices have been trading at a premium to that of domestic beef since the turn of the New Year.

The weekly update suggests that US market participants have been following the news closely this week as reports filtered through in relation to the developing allegations made against a number of Brazil’s biggest processing companies. Steiner Consulting Group comments the main concern for US end users is the impact of a potential Chinese ban on Brazilian beef – Brazil was the biggest supplier of beef to China in 2016.