US imported grinding meat prices hit four-year high
Jon Condon, BEEF Central (AU)
September 9, 2019
PRICES for Australian imported lean grinding meat in the US have hit a four-year high when measured in Aussie dollar terms, reaching 721c/kg in trading last week.
Not since the US’s significant domestic beef shortage caused by its own earlier drought have prices in A$ reached this level, last seen around September 2015.
Grinding meat prices into the US have gradually improved this year, from around A600c/kg in late January, and A660c/kg in early July.
Strong bidding competition from China for the same product, absence of grinding meat supply to the US out of New Zealand as NZ swings more heavily to supply into China, softer currency and general strong international demand are driving the 20 percent lift in imported Australian 90CL beef prices into the US so far this year.
Currency value has played a part, with the A$ dipping below US67c briefly in trading last week, and sitting for much of the week around 67.6c before lifting sharply this morning to 68.4c. Last week’s currency level was the lowest seen against the US Greenback since a brief period in early 2009 when it dipped below US65c.
In its weekly US imported beef report, US analysts Steiner Consulting said the market for imported lean manufacturing beef used for hamburgers continues to trade very firm, largely because increased competition in the global market means overseas suppliers like Australia can afford to pass on US bids.
Another reason for the firm imported market was that domestic lean beef continued hold value, Steiner said.
“While domestic buyers can look at history and expect a seasonal decline in the value of lean beef to play out, the longer the market continues to trade like this the more anxious US buyers become – and hence the need to have some product around them for fourth quarter (October-December) needs,” Steiner said.
Import volume into the US is lower in September and October, largely because of the seasonal decline in shipments from New Zealand. In the four August weeks for which imported data is available, total imports from grinding beef supplying countries to the US was 36,942t, Steiner reported, down 11,360t or 24pc from a year ago. This is the equivalent of about 630 full truckloads of product that did not arrive in US Ports the last four weeks.
“It is not hard to conceive why imported beef prices were higher, in an environment where there is significantly less volume available to traders and domestic US 90CL is still trading at $225/cwt,” Steiner’s weekly report said.
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