US imported and domestic beef prices move in opposite direction
06 March 2018
Market prices for US imported beef eased last week as importers looked to secure profits on product purchased at the end of last year.
There continues to be limited trading between overseas suppliers and US importers, as securing replacement product at a desirable price remains a challenge for US importers. Lower slaughter levels in New Zealand and strong demand in Asian markets for Australian product has limited the amount of beef available to US end users.
Good moisture conditions in New Zealand in the last few weeks is expected to keep slaughter levels low through until the end of March. US end users will likely wait for increased offerings and subsequent lower prices for product delivered in May and June.
The imported 90CL beef indicator eased 2.5US¢ from the previous week, to 212US¢/lb CIF (down 2A¢ to 599.90A¢/kg CIF).
US domestic prices have continued to trend higher and market participants anticipate prices will trend seasonally higher during March and April. Increasing prices for 50CL beef in the domestic market has also led to some US end users looking for imported product.
Highlights from the week ending 2nd March:
- CME fed cattle futures continued to drift lower this week as market participants, once again, worry about slower than expected marketing and potentially significant supplies of market ready cattle in April and May.
- US fed cattle slaughter for the week ending 3rd March was estimated at 483,000 head, up from 445,000 head the week before and now 3.7% higher than a year ago.
- Non-fed cattle slaughter for the week was estimated at 127,000 head, 5.9% higher than a year ago. Non-fed slaughter in the last six weeks has averaged 6.1% above year ago levels, in part because low dairy prices are pushing more dairy cows to market.
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