US imported beef prices lift on lower NZ offerings
12 February 2018
US imported beef prices moved higher this week, driven in the most part by reduced supplies out of New Zealand, as improving moisture conditions there have limited the number of cattle coming to market.
US end users have noted extremely firm asking prices from New Zealand packers and market participants looking to secure product for immediate delivery have had little choice but to accept the demands. However, given the larger cow herd and weaker dairy prices in New Zealand, an increase in cow slaughter is forecast compared to year-ago levels.
The imported 90CL beef indicator moved 4.5US¢ higher from the previous week, to 213.5US¢/lb CIF (up 25A¢, to 600.14A¢/kg CIF).
Pasture conditions in the US have continued to deteriorate, especially in key cow-calf producing regions. The market sentiment at this stage concludes that a good spring rainfall would eliminate any long-term impact. However, the prospect of La Niña weather conditions prevailing over the spring and summer looks increasingly likely. Should this come to fruition, the discount between domestic and imported beef prices would expand, given higher cattle turnoff in the US.
Highlights from the week ending 9th February:
- US fed cattle slaughter for the week ending February 11 was an estimated 467,000 head, 2.8% higher than a year ago. Non-fed slaughter for the week was estimated to be 126,000 head, 1.3% higher than a week ago.
- CME fed cattle futures were lower for the week but the impact from the sharp selloff in equities has been muted, at least to this point.
- All measures of the Restaurant Performance Index were sharply higher in December, pointing to improved business conditions for the US foodservice industry.
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