US imported beef prices supported by robust domestic demand

US imported beef prices lifted this week, supported by growing demand in the domestic market but primarily as a result of ongoing supply constraints and higher offering prices from overseas packers.

In the weekly update commissioned by MLA, the Steiner Consulting Group reported that the imported 90CL beef indicator increased 3.5US¢ from week-ago levels, to 206US¢/lb CIF (up 10A¢, to 601.25A¢/kg CIF).

Steiner Consulting Group reports that a number of end users have re-entered the market this week, but continue to be challenged by firm prices due to the limited product available. The enduring shortage of supplies of imported beef on the spot market has ensured a premium still remains in place for imported beef over domestic product.

Total beef imports into the US for the first six weeks of the year were down 16% year-on-year.  Steiner Consulting Group reports on data from the USDA/AMS showing that imports from Australia for the first six weeks of the calendar year were down 40% year-on-year and back an estimated 58% from 2015 figures – albeit 2015 was a record breaking year. Elsewhere, imports from Canada were back 13% compared to the same time last year and New Zealand tracked 20% lower year-on-year. The decline in imports has somewhat been cushioned by the increase of Mexican beef entering the market, up 28% compared with year-ago levels.

Steiner Consulting Group also notes that higher prices for US fed cattle has assisted in some capacity with driving demand for imported beef. Despite declining 10% year-on-year, the price for choice beef cut-out this week moved $6/cwt higher than last week. The demand for beef in the US remains robust, coming off the back of weaker demand seen in 2016, attributed to the lower price of competing proteins.