Australian Beef Looking Good in the US
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Australian beef looking good in the US

Australian beef looking good in the US

The US beef industry is returning to a somewhat ‘more normal’ state while the US still has the ability to impact the market, particularly given any possible change to the North American Free Trade Agreement (NAFTA). The domestic 90CL prices in the US is following a similar trend to last year, and while below the five-year average, it is consistent with the five-year trends.

From an Australian producer perspective, although the US import prices are not at the record levels experienced in 2014 and 2015, they are returning to a more normal trend.

How is the imported cow meat tracking in the US?

  • The imported cow meat 90CL price in US dollars has tracked very close to the five-year trend, just above USD2.00/lb (USD4.40/kg).
  • Prices could be expected to remain relatively steady through to July and then increase to USD2.20/lb for the remainder of the year
  • The margin between the two price series is returning to levels seen in 2012 – in part, due to a more favourable exchange rate.

What is influencing US prices?

  • US cattle numbers have returned to previous levels above 90 million head
  • Increasing cattle availability has eased the need for feedyards to drive production through weight gain
  • The average carcase weights for fed cattle are now 13 kilograms lighter than one year ago. With lower fat trimmings there is a reduced need for lean trimming to blend with them.
  • increased US imports from New Zealand, Uruguay, Argentina and Brazil

While US beef demand is looking good, a key challenge for Australia in this market will be outcompeting the other suppliers, as our production volumes gradually recover.

What are your views regarding the beef market? We would like to hear from you.