Imported market still moving up; mixed outlook for cattle prices in the US

30 July 2015

There is more interest from US buyers for imported lean beef in the short-term, according to the latest weekly report from the Steiner Consulting Group. At the same time, they report that the spot market is showing less beef availability, and some importers are concerned about the impact of high Australian beef exports reaching the annual quota.

These factors have combined to push the price of most imported beef categories higher again this week. The indicative 90CL cow beef price was up 5US¢, to 240US¢/lb CIF (up 19.7A¢, to 724.6A¢/kg CIF), and most other indicators were also dearer.

The market for cattle in the US has been quite inconsistent this year. Fed steer prices (shown in blue in the chart below) increased through the first quarter, but have dropped in price relatively quickly since then. Current futures prices (orange) are suggesting a small improvement through the rest of 2015 before a drop next northern summer, but are around 6US¢/lb lwt lower than the futures market suggested four weeks ago (red).


Source: Steiner Consulting Group, CME

The feeder cattle market (blue, in the chart below), on the other hand, showed a much more sustained run of higher prices, but dropped in July, and is expected to continue to slide over the next 12 months, if the current futures market is accurate. Similar to the fed cattle market, though, current futures (orange) are around 6–8US¢/lb lwt cheaper than four weeks ago (red).


Source: Steiner Consulting Group, CME

Reflecting the strength of the imported lean beef market is the consistency of the US domestic cow indicators, which have maintained an average price around 200US¢/lb lwt for the last five months. The low supply of cows for slaughter remains the key driver for these prices being so high.

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