US Imports Of Australian Beef Seen Up 35%

Australian beef and veal exports to the US are expected to rise by 35% to 360,000 tonnes during the 2014/15 year, the highest annual volume since the 2004/05 year as US cow/calf producers keep more of their cows for another calf or two after herds dropped to a 63-year low.

The prediction came from the Australian Bureau of Agricultural and Resource Economics and Sciences, or ABARES, in its monthly report on agricultural prices and expectations.

Those beef and veal export volumes are expected to keep Australian prices high, although the seasonal return of New Zealand as a manufacturing beef exporter to the US from late 2014 may limit price gains.

ABARES said the higher US beef demand was being driven by lower US cow slaughter and production of the lean beef such cows yield.  Most of the meat from cows is ground, and if domestic production falls short, grinders turn to imported lean product.  Between July and September, US cow slaughter was just below 1.3 million head, the lowest for the period since 2005.

Besides the US’ effort to rebuild its herd, the US market is experiencing strong demand for veal amid strong demand for dairy calves from feedlots and from the dairies themselves as milk prices rise.

And because of improved pasture conditions thanks to a warmer equatorial Pacific Ocean, cow slaughter is not expected to increase any time soon.  This means demand for lean beef imports may remain strong.

Total US beef and veal imports between July and September 2014 were 52% higher than the 2013 period.  Shipments from Australia comprised the bulk of these imports, but the US also imported more from Canada, New Zealand, Mexico, Nicaragua and Uruguay.




US fed cattle prices turned sharply lower last week, following the seasonal trend for an early December dip with a vengeance.

If the seasonal hold, however, the market will see a rebound in late December as wholesale beef demand picks up for New Year’s retail advertising thrusts.

Fed cattle in the Southern Plains last week were down 2.97% at an average $167.80 per cwt on a live basis, compared with the peak of $172.94 the previous week, according to USDA figures.  The actual range was $166 to $168.

No cash trading was reported through Tuesday.  Bids from packer buyers were reported at $162 to $164 per cwt on a live basis with asking prices around $170.  On a dressed basis, bids were noted around $256 with asking prices nearer $268.

At the same time, prices for Southern Plains 700- to 800-pound feeder steers remained about steady at an average of $240.79.  The combination of lower fed cattle prices and steady feeder cattle values pinched feedlot breakevens, although they remain profitable.

Feeder cattle remain well supported amid tight supplies at auctions.  Sources say they expect the market to remain strong well into next year.

The CME Feeder Cattle Index for the seven days ended Monday was $241.71 per cwt, down $0.78 from Friday, but the Jan futures contract settled Tuesday at $232.77, up $0.90.

The USDA reported mixed beef markets Tuesday afternoon, with the choice cutout at $250.51 per cwt, down $1.47, and the select cutout at $236.10, up $0.74.  As demand for seasonal cuts wanes, the beef complex may continue to decline until equilibrium is reached.

The choice/select spread narrowed to $14.41 Tuesday, and there were 125 loads of fabricated product sold into the spot market.