US imported beef prices track lower
03 October 2018
US imported beef prices continued to decrease last week, driven by weaker prices for domestic grinding beef. Post (US) Labour Day holiday through until the end of the year, ground beef prices seasonally record some downwards pressure as the northern hemisphere winter impacts burger sales and retailers start to feature holiday items more extensively.
Ample supplies of cheap competing proteins and higher non-fed slaughter, up 5% on year-ago levels last week, will ensure the market remains well supplied in the short-term.
The imported 90CL beef indicator declined 6.5US¢, to 182.5US¢/lb CIF (down 20¢, to 555¢/kg CIF).
US end users appear well covered in the near-term and remain reluctant to accept higher Australian offerings. Australian manufacturing beef continues to flow through into Asian markets where bids remain strong. Central American countries are offering grinding beef at a notable discount to Australian product and New Zealand supplies could begin to lift as the year closes out, further pressuring imported prices.
NAFTA replacement deal
The United States, Canada and Mexico came to a last-minute agreement in principle on a revised North American Free Trade Agreement (NAFTA) on Sunday evening, to be formally known as the United States-Mexico-Canada Agreement (USMCA).
Under the new trade agreement, the beef supply between the respective nations will remain uninterrupted. Over the last decade (discussed in more detail last week), around two million cattle a year have been trucked from Canada and Mexico into US feedlots and abattoirs, representing about 8% of the US steer and heifer slaughter, while boxed beef has been regularly traded in both directions across both borders. In terms of agriculture, the US has been granted improved access to Canada’s dairy, chicken, turkey, and egg markets as a result of the renegotiation.