March 24, 2009

The US imported beef market weakened during the week, particularly given the sharp increase in the Australian dollar on last week.

Prices were steady to high this week in US dollar terms, as domestic supplies wane and beef demand outlook for the US summer months improved. Imported beef prices in Australian dollar terms weakened due to the currency strengthening this week, reverting gains made in the last few weeks.

There is a reported risk of the US dollar depreciating because of some market expectations that the US Federal Reserve Bank will further increase money supply following its recent cash injection. There are concerns that this may impact the imported beef market.

There are also other factors pressurising the imported beef trade, including the recent decision by the US dairy cooperation, Cooperatives Working Together, to continue dairy cow liquidation, which will increase lean beef trim supply this spring.