March 1, 2010

Strong demand pushes up US beef prices

US processor lean beef supplies fell to low levels in late February, pushing imported manufacturing beef prices up.

Prices continue to push higher both in US dollar and Australian dollar terms - a testament to stronger demand for lean manufacturing beef in the US, as the Australian dollar continues to remain above the 87US¢ mark. Very high pork trimming prices are also contributing to the beef price rises.

CIF prices for Australian 90CL moved up 4US¢, averaging 158.5US¢/lb CIF, while FAS prices in Australian dollar terms gained 11.9A¢/kg over the past week, to 362.3¢/kg FAS. Looking back at 2008, where prices reached a record of 190.5US¢/lb CIF in July, prices in late February were averaging around 140US¢/lb CIF.

Considering the recent shortage in lean manufacturing beef supplies and prices continuing to rise, there will be incentive for imported beef supplies to remain in store so as to hedge against further shortfalls in supply.