US imported beef prices maintained their upward trajectory this week, as a result of limited offerings from overseas suppliers and tight availability of spot supplies in the US.
The imported 90CL beef indicator lifted 4US¢ from week-ago levels, to 208.02US¢/lb CIF (up 18A¢, to 580.01A¢/kg CIF).
End users were once again active in trying to securing product for delivery later in the year, with US fed cattle futures edging higher throughout the week. However, limited supplies from Australia and New Zealand continue to support imported beef prices.
Large US foodservice operators have faced an increasing level of competition from a growing number of independent restaurants and grocery stores, with large operators reporting a decline in demand during the first half of 2017.
However, Steiner Consulting Group reports that sales from traditional fast food operators were bolstered in July and August by widespread promotions. With US beef supplies on the rise, the fast food industry continues to support domestic product. If sustained, large spreads between domestic and imported beef would likely return.
The latest USDA cold storage report indicates that, as at 31 August 2017, total frozen red meat inventories in the US were 3% lower year-on-year. Frozen beef inventories remained unchanged compared with the same period in 2016, at approximately 216,000 tonnes – notwithstanding a 10% increase in inventories from the July 2017.
Steiner Consulting Group comment that the sharp monthly increase may indicate that the market is struggling to absorb the increase in US beef production, however it may also reflect the increasing export demand, with product entering cold storage before being shipped overseas.