Competition heats up US import market
01 June 2017
US imported beef prices increased this week, as a result of robust competition from US end users vying to secure product for the months ahead. Furthermore, high domestic beef prices and limited cattle availability out of Australia and New Zealand continue to drive the market higher.
The imported 90CL beef indicator lifted 3.3US¢ from week-ago levels, to 217.8US¢/lb CIF (up 8A¢, to 645.40A¢/kg CIF).
Market participants have immediately turned their attention to covering needs for the US summer period following the Memorial Day holiday. Steiner Consulting Group reports Memorial Day business was mixed, with a snap of cold weather and showers across the US east coast impacting demand.
End users continue to be faced with supply shortages, particularly for lean grinding beef, paying inflated prices in order to secure product. Market participants remain divided on the direction of US beef prices, with a number of short term challenges creating in-market uncertainty.
Supply constraints out of Australia and New Zealand continue and the seasonal drop in New Zealand slaughter is approaching which will further contract spot supplies. Uruguay cattle slaughter also typically declines from July to September, leaving Australia as the main supplier of lean grinding beef.
Feedlot placements have increased during US spring, with the likelihood of more cattle being available in August and September. However, robust domestic demand and reduced carcase weights could partially offset any improvement in domestic supplies.
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