Very slow beef shipments to the US to start July
14 July 2016
Australian beef exports have made a very slow start in July – particularly to the US, with shipments of just 7,698 tonnes shipped weight after 13 days (Department of Agriculture and Water Resources). This is contributing to an overall reduction in available supply of beef in the US import market, along with the seasonal decline in NZ beef availability, and helping to keep prices up.
In this week’s report from the Steiner Consulting Group, the imported 90CL cow beef indicator was 2US¢ higher, at 206.5US¢/lb CIF (up 0.5A¢, to 601.0A¢/kg CIF – the appreciating A$ in the last week serves to limit gains in A$ terms). This continues the slow climb of the past two months, as US end users look to ensure they have sufficient stocks of lean beef to meet consumer demand for ground beef products.
While the market has performed well so far in the US summer, there are likely to be some headwinds in the coming months. Demand for beef at retail often slows in late summer, and US cow slaughter is well up on last year, which will increase the availability of lean beef in general. The very narrow gap between imported and domestic beef could also limit how much higher imported prices will move.
The USDA has also revised its forecast for 2016 beef production in the July World Agricultural Supply and Demand Estimates. US beef production is now forecast to be 5.3% higher in 2016 than in 2015, with domestic availability up 2.9%. Second quarter slaughter was higher than expected, and feedlot marketings are reportedly likely to remain high in the third and fourth quarters of this year.
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