September 7, 2010

US beef import prices stable

Imported beef prices in the US remained relatively steady last week, with high prices maintained for the past three months, supporting this trend has been the higher US domestic lean manufacturing beef prices.

The US domestic lean manufacturing beef market has been trading at a premium to the imported beef market for the past four months.

The imported 90CL indicator is currently at 165.5US¢/lb CIF (unchanged from last week, but 26% higher on-year), while the US domestic fresh 90CL indicator is at 168US¢/lb. Returns to Australian exporters have been squeezed, as the US dollar appreciated last week to over 90US¢.

There are several factors which could see the US market turn either way. Tight imported beef supplies may continue to support prices, however, there are signs that the US foodservice industry is still contracting - the latest National Restaurant Performance Index for July declined by one point on the previous month to 99.4 points. Of concern within the US foodservice sector, is the on-year decline in quick service sales during August - a negative for manufacturing beef.