Wholesale prices of domestic and imported boneless 90CL beef in the US have already lifted to near record levels as manufacturing beef supplies remain very tight, mainly due to lower imports from Australia, according to USDA.

Other markets such as Japan and Russia have ramped up Australian beef purchasing, making the market more competitive, particularly for 85CL beef. Australian exports to Japan so far this month are at 17,632 tonnes swt and Russia has doubled its buying rate to 1,832 tonnes. Exports to the US for April are currently at 8,705 tonnes swt, compared with a total of 26,009 tonnes swt in April last year.

US quick service restaurants are now nervous that wholesale ground beef prices will go above the records seen in mid 2008. Domestic and imported prices are already 14% and 15%, respectively, above April 2008, with no indication that prices will ease heading into the historically peak period of June.

There will be pressure for retailers to lift their product prices amid rising manufacturing beef prices, which will be difficult to do as a precedent for discounting was set during the economic downturn.