US Imported Beef Market · put the numbers in the broader context and recog-nize the effect this natural disaster will have on beef supplies in Australia. According to MLA data as

mand all contributed to the firm trading in the im-ported beef complex. Market participants that we interviewed also noted that some traders may have been caught a bit short and are actively looking to cover needs. With tight spot supplies prices in the FOB market are grinding higher and replacement values overseas are well bid. New Zealand sup-plies continue to note that they see very strong de-mand from Asian markets at this time. While New Zealand data is published with a three week lag,

Imported Market Activity for the Week

Imported beef prices were higher towards the end of the previous week and prices advanced steadily higher through much of the week ending February 8. By the time we conducted our regular weekly survey of market participants prices for some items were as much as a nickel (5 cents) higher than the week before. Limited offerings from overseas suppliers, higher domestic lean grinding beef values and stronger US end user de-

Market Highlights for the Week:

• Imported beef prices were notably higher last week on a combination of limited offerings from overseas suppliers, higher prices for domestic lean grinding beef and strong end user demand.

• New Zealand packers continue to report good demand in Asian markets and well sold positions into late March. • Flooding in Australia has caused dramatic cattle losses, with news reports suggesting hundreds of thousands

lost. If true, this could further reduce the June 30 inventory, which already was forecast 4% lower than previous year

• USDA forecasts 2019 US beef production in US up 2.8% vs. the previous year and per capita consumption up 1.9%. Despite supply increases in recent years per capita beef availability in the US market remains below 2010 levels.

• While beef domestic availability has yet to recover to 2010 levels, pork supplies are up 6% vs. 2010 and chicken supplies are 11% higher, which helps explain some of the current weak pricing for these proteins.

P r e p a r e d b y : S t e i n e r C o n s u l t i n g G r o u p | S t e i n e r C o n s u l t i n g . c o m | 8 0 0 - 5 2 6 - 4 6 1 2 | s e r v i c e @ s t e i n e r c o n s u l t i n g . c o m

Volume 19, Issue 6 February 8, 2019

US Imported Beef Market A Weekly Update

Prepared Exclusively for Meat & Livestock Australia - Sydney

Beef Pork Broilers59.6

56.9

58.0

51.0

52.0

53.0

54.0

55.0

56.0

57.0

58.0

59.0

60.0

47.8

50.8

51.7

42.0

43.0

44.0

45.0

46.0

47.0

48.0

49.0

50.0

51.0

52.0

53.0

82.3

91.892.4

74.0

76.0

78.0

80.0

82.0

84.0

86.0

88.0

90.0

92.0

94.0

Per Capita Consump on (Disappearance) of Beef, Pork and Chicken. Retail Weight Pounds per Person. Source: USDA. Analysis by Steiner Consul ng

participants note that weather conditions so far have been quite seasonable and cow slaughter has yet to pick up. Faced with well sold forward posi-tions and no particular change in the supply situa-tion New Zealand packers appear content to hold firm in their offerings and routinely passing on lower bids. Australia floods/supply situation Floods in parts of Queensland have caused dra-matic death losses. A report in the Guardian noted that some 300,000 cattle may have perished and other news reports noted losses were expected to be in the hundreds of thousands. It will likely take some time to fully understand the impact and it is possible we may never know exactly how many cattle were lost. As you read the many detailed accounts of the flooding impact, it is important to put the numbers in the broader context and recog-nize the effect this natural disaster will have on beef supplies in Australia. According to MLA data as of June 30, 2018 the total Australian cattle in-ventory was around 27.2 million head (Jan 2019 projections). Queensland accounts for around 43% of the Australian cattle herd, which would put the Queensland cattle numbers at around 11.7 million head. A loss of 300k head of cattle would repre-sent 2.6% of the Queensland inventory and a 1.1% decline in the total Australian cattle supply. The map above was based on 2016 data but it offers a more detail breakdown of how Queensland cattle stocks is distributed. The two areas most affected by the flooding were the Southern Gulf, which in 2016 had about 1.123 million head of cattle and North Queensland Dry Tropics, with around 1.3 million head. The precipitation map shows that some parts of the state received over 1200 mm of rainfall (47 inch), most of that coming in a 10 day stretch at the end of January and first week of Feb-ruary. But even as this part of Queensland strug-gles with torrential rainfall, many other parts of Australia, including some parts of Queensland, are suffering drought conditions. The result is contin-ued liquidation of the cattle herd in addition to the stock losses due to flooding. Prior to the floods MLA was projecting the Australian cattle herd at the end of June 2019 to be 26.2 million head, 3.8% lower than the previous year. Following this natu-ral disaster cattle numbers may decline by as much as 5% y/y although. The effect could be a notable reduction in beef supply availability from Australia in the second half of the year.

VOLUME 19, ISSUE 6 US IMPORTED BEEF MARKET PAGE 2

USDA updates 2019 Supply/Demand Projections Due to the government shutdown in late December and January USDA had to skip its monthly report on agricultural supply/demand projections. In the Feb-ruary report USDA offered some downward revi-sions in beef production and per capita disappear-ance, which brings the USDA forecasts a bit more in line with our forecasts presented in the MICA meet-ings last fall. We could see further revisions once USDA and private analysts receive the results of the semi-annual cattle survey that will be released on

Queensland Cattle Distribution. Source: MLA & ABS Map Link: goo.gl/yW7oEv

Queensland Rainfall: Jan 1 - Feb 10 Source: Australian Bureau of Meteorology

February 28. One of the key numbers in the report is the per capita consumption calculation. It is im-portant because it adjusts the production number by the normal population growth and also accounts for the effect of imports and exports on domestic supply availability. Beef prices that we track on a daily and weekly basis are for product that is trad-ed in the domestic market and those prices are di-rectly affected by domestic demand and the supply available in domestic channels. Beef prices to start the year have been quite robust while pork and chicken prices have been under pressure. The three charts on page 1 help put those price trends in some context. While beef supplies in the domestic market have increased in the last three years, per capita beef availability in 2018 was still about 4% lower than it was in 2010. On the other hand eco-nomic conditions and consumer incomes last year were significantly better than they were in 2010, hence the improvement in demand. Contrasting this beef supply number is the per capita availabil-ity (consumption) of pork in 2018, up 6% and per capita availability of chicken, up 11% since 2010. USDA currently expects per capita beef availabil-ity in 2019 to increase 1.9% from the previous year but remain below 2010 levels. This estimate will be greatly affected by trade flows and ultimately the supply of beef coming to market. Cattle weights to start the year have been well below year ago levels. Poor feedlot conditions could continue to hamper weights for much of Q1 and could affect supplies in Q2 as well. The cattle inventory data will shed light on the supply of feeders outside feedlots. Winter wheat may have been affected by extreme cold conditions this year and this may once again negatively affect the ability of produc-ers to add more pounds on cattle outside feedlots. USDA is currently forecasting US beef production in 2019 to be 2.8% higher than a year ago. Beef imports are expected to be up 0.5% while exports are expected to be up 2.4%. There is a plausible case to be made that imports this year will be lower even with Argentina shipping some fresh product to the US. Reduced supply availability in Australia and New Zealand and strong demand in Asian mar-kets will continue to limit imports from those mar-kets. Additionally, we expect so see strong de-mand in Japan and S. Korea, especially if Australi-an supplies decline in the second half of the year.

USA Cattle/Cow Supply USDA has once again resumed reporting on the number of beef and dairy cows coming to market although it will take some time to bridge the gap in statistics that was created during the 35 day gov-ernment shutdown. The latest data available is for the week ending January 5, showing total beef and dairy cow slaughter about 1% lower than the pre-vious year. We think January cow slaughter num-bers have been higher than a year ago but the rate of growth has slowed down. Bull and cow slaugh-ter for the week ending February 9 was estimated at 131,000 head, 1.7% higher than a year ago. In the last four reported weeks non-fed slaughter has averaged 132,300 head/wk, slightly under year ago levels. With no appreciable increase in slaughter prices for lean beef have been trending higher, in line with the seasonal increase. Prices for 90CL boneless beef last week were near $210/cwt, $14 or 7% higher than at the end of 2018. Seasonally domestic lean beef prices move higher into April as foodservice demand improves and end users start to gear up for the start of the grilling season.


WEEKLY COW & BULL SLAUGHTER. '000 HEADSource: USDA-AMS

90

100

110

120

130

140

150

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5-Yr Avg. 2017 2018 2019

Source: Chicago Mercantile Exchange

CME Cattle Feeder Index and US Cattle Markets


60

80

100

120

140

160

180

200

220

240

260

2002 2003 2004 2005 2006 2007 2007 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

CME Feeder Cattle Index

Special Live Animal Reference Price

Current Week Prior Week Last Year

7-Feb-19 31-Jan-19 8-Feb-18

CME FEEDER CATTLE INDEX 141.69 141.86 -0.1% 147.59 -4.0%

8-Feb-19 1-Feb-19 9-Feb-18

FED STEER (5-MKT AVG) 123.83 123.31 0.4% 126.04 -1.8%

CUTTER COW CARCASS, NATIONAL, 90% LEAN, 350-400 LB. (carcass wt.) 94.00 93.00 1.1% 112.00 -16.1%

BONER COW CARCASS, NATIONAL, 85% LEAN, 400-500 LB. (carcass wt.) 95.00 95.00 0.0% 109.50 -13.2%

BREAKER COW CARCASS, NATIONAL, 75% LEAN, 500+ (carcass wt.) 89.00 88.00 1.1% 103.00 -13.6%

CUTTER COW CARCASS CUTOUT, 5-DAY MA, USDA 163.43 160.97 1.5% 154.79 5.6%

% CHANGE VS. WK AGO

Change from Last Year

TABLE 2 – IMPORTED BEEF PRICES, 7:45 DAYS, CIF

Change From Last

Week

Change From Last

Year

US East Coast Australian/NZ Lean, CIF

95 CL Bull, E. Coast 214.0 216.0 210.0 212.0 4.0 225.0 226.0 -10.0

90 CL Blended Cow 202.0 2104.0 200.0 202.0 1902.0 213.0 214.0 1890.0

90 CL Shank 201.0 203.0 200.0 201.0 2.0 212.0 213.0 -10.0

85 CL Fores 188.0 189.0 188.0 189.0 0.0 194.0 195.0 -6.0

85 CL Chucks UNQ UNQ N/A UNQ N/A

95 CL Bull, W. Coast 212.0 215.0 208.0 210.0 5.0 224.0 225.0 -10.0

Uruguay CFH 90CL, E. Coast UNQ UNQ N/A UNQ N/A

US East Coast, Trimmings, CIF

85 CL Trimmings 187.0 188.0 187.0 188.0 0.0 193.0 194.0 -6.0

80 CL Trimmings 174.0 175.0 173.0 174.0 1.0 165.0 167.0 8.0

75 CL Trimmings UNQ UNQ N/A UNQ N/A


US East Coast Australian Cuts, CIF

Cap Off Steer Insides 275.0 280.0 275.0 280.0 0.0 280.0 285.0 -5.0

Steer Insides 14/18 UNQ UNQ N/A UNQ N/A

Steer Flats 220.0 225.0 220.0 225.0 0.0 UNQ N/A

Steer Knuckles 225.0 230.0 225.0 230.0 0.0 240.0 245.0 -15.0


8-Feb-19 1-Feb-19 9-Feb-18


TABLE 3 – IMPORTED BEEF PRICES, 7:45 DAYS, US WAREHOUSE

Change From Last

Week

Change From Last

Year

US East Coast Australian/NZ Lean, FOB US Port

95 CL Bull, E. Coast 225.0 226.0 221.0 223.0 3.0 234.0 235.0 -9.0

90 CL Blended Cow 211.0 212.0 206.0 207.0 5.0 221.0 223.0 -11.0

90 CL Shank 208.0 210.0 205.0 206.0 4.0 219.0 220.0 -10.0

85 CL Fores 193.0 194.0 193.0 194.0 0.0 199.0 200.0 -6.0

85 CL Chucks UNQ UNQ N/A UNQ N/A

95 CL Bull, W. Coast 223.0 224.0 219.0 220.0 4.0 232.0 233.0 -9.0

Uruguay CFH 90CL, E. Coast UNQ UNQ N/A UNQ N/A

US East Coast, Trimmings, FOB US Port

85 CL Trimmings 192.0 193.0 192.0 193.0 0.0 198.0 199.0 -6.0

80 CL Trimmings 184.0 183.0 184.0 0.0 174.0 175.0 9.0

75 CL Trimmings UNQ UNQ N/A 170.0 171.0 N/A


US East Coast Australian Cuts, FOB US Port

Cap Off Steer Insides 285.0 285.0 0.0 290.0 295.0 -10.0

Steer Insides 14/18 UNQ UNQ N/A UNQ N/A

Steer Flats 225.0 230.0 220.0 225.0 5.0 UNQ N/A

Steer Knuckles 245.0 250.0 240.0 245.0 5.0 250.0 255.0 -5.0


8-Feb-19 1-Feb-19 9-Feb-18


TABLE 4 – US DOMESTIC BEEF AND CATTLE PRICES


Change From Last

Week

Change from Last

Year

Low High Wt.Avg Low High Wt.Avg Low High Wt.Avg

Domestic Cutouts

Choice Cutout 215.35 214.26 1.1 206.52 8.8

Select Cutout 211.17 213.15 -2.0 202.74 8.4

Domestic Lean Grinding Beef

90 CL Boneless 204.7 214.0 209.6 201.0 212.0 206.9 2.7 214.0 220.5 215.7 -6.1

85 CL Beef Trimmings 170.0 195.1 175.3 167.0 180.0 172.6 2.7 171.0 215.0 185.9 -10.6

50 CL Beef Trim 82.5 82.5 61.4 69.4 69.4 58.0 3.5 94.5 94.5 83.9 -22.5

Domestic Pork Trim

42 CL Pork Trim 23.0 41.3 29.1 24.0 44.5 29.2 -0.1 24.3 37.7 27.8 1.3

72 CL Pork Trim 48.0 73.5 54.0 50.9 73.3 58.0 -4.0 72.8 75.4 74.1 -20.0

Point of Lean Values

90 CL Domestic 232.9 229.9 3.0 239.6 -6.8

50 CL Beef Trimming 122.8 115.9 6.9 167.8 -44.9

42 CL Pork Trim 69.4 69.5 -0.1 66.3 3.1

72 CL Pork Trim 75.0 80.6 -5.5 102.8 -27.8

National Direct Fed Steer 123.83 123.31 0.5 126.04 -2.2(5 day accum. wt. avg. price)

Prior Week Last YearCurrent Week

8-Feb-19 1-Feb-19 9-Feb-18

TABLE 5 – FUTURES AND SLAUGHTER INFORMATION


Futures Contracts Current Week Prior Week Last Year

8-Feb-19 1-Feb-19 9-Feb-18

Live Cattle Futures

February '19 127.375 125.450 1.93 126.850 0.53

April '19 127.925 126.275 1.65 126.125 1.80

June '19 118.100 116.150 1.95 118.000 0.10

August '19 114.575 113.000 1.58 114.975 -0.40

Feeder Cattle Futures

March '19 144.100 142.525 1.57 150.925 -6.83

April '19 145.900 144.000 1.90 151.775 -5.88

May '19 146.900 144.600 2.30 151.775 -4.88

August '19 150.900 148.700 2.20 151.775 -0.88

Corn Futures

March '19 374 1/4 378 1/4 -4.00 361 1/2 12.75

May '19 382 1/4 387 -4.75 369 1/2 12.75

July '19 390 394 3/4 -4.75 377 1/4 12.75

September '19 393 1/2 397 1/2 -4.00 384 1/2 9.00

Ch Wheat Futures

March '19 517 1/4 524 1/4 -7.00 446 3/4 70.50

May '19 519 1/2 528 1/4 -8.75 459 3/4 59.75

July '19 522 1/4 532 -9.75 473 1/2 48.75

September '19 529 3/4 539 1/2 -9.75 487 1/2 42.25

Slaughter Information 7 Days Ending 7 Days Ending 7 Days Ending

9-Feb-19 2-Feb-19 10-Feb-18

Total Cattle Slaughter 614,000 593,000 21,000 589,000 25,000

26-Jan-19 19-Jan-19 27-Jan-18

Total Cow Slaughter 0 0 0 125,021 -125,021

Dairy Cow Slaughter 0 0 0 67,309 -67,309

Beef Cow Slaughter 0 0 0 57,712 -57,712

Change From Last Week

Change From Last Year

Change From Last Week

Change From Last Year

Datanotavailable

Datanotavailable

TABLE 7 - US BEEF IMPORTS (Source: USDA/AMS)


US Fresh/Frozen Beef Imports. Metric Ton. Data Source: USDA/Agricultural Marketing ServiceImports as of February 2, 2019Individual Country Volume. MT & Y/Y % Ch. Total

-

5,000

10,000

15,000

20,000

25,000

30,0002017 2018 2019

76,000

78,000

80,000

82,000

84,000

86,000

88,000

90,000

92,000

94,000

Total

4.0%-2% -33%11% 35% 68%22%

TOTAL YTD: +2.0%

YTD Imported Fresh/Frz Beef Passed for Entry in the US

week 5 2/3/2018 2/2/2019Argentina - -

Australia 20,669 20,316 (353) -1.7%

Brazil - - -

Canada 22,243 27,208 4,965 22.3%

Chile - - -

Costa Rica 667 770 103 15.4%

France - - -

Honduras 151 268 117 77.5%

Ireland 336 394 58 17.3%

Japan 120 107 (13) -10.8%

Mexico 17,915 19,818 1,903 10.6%

Netherlands - - -

New Zealand 20,021 13,390 (6,631) -33.1%

Nicaragua 4,647 6,295 1,648 35.5%

Spain - - -

Uruguay 2,569 4,314 1,745 67.9%Total 89,336 92,880 3,544 4.0%Source: AMS - USDA


USA Quota Entries through Week Ending February 4 Source: US Customs

2017 YTD2018 YTDY/Y %Quota

% cleared

5,996,7962,011,191 6,206,251

20,180,86220,276,712

21,335,09012,544,720

1,315,334

3%

10%418,214,000 213,402,000 20,000,000 64,805,000

0%

5%

-41%

6%

53%

10%

0

100,000

200,000

300,000

400,000

500,000

Australia New Zealand Uruguay Other

Australian Beef Quota Position 7-Feb-19

Metric Ton. Australian Department of Agriculture Statistics

2019 Quota

428,214

Quota Shipments40,207 9.4%

Balance388,007

90.6%

Note: Customs did not provide an update this week. Data reflects last week’s levels.


Online source: http://www.complexia.com.au/Documents/Density_maps/cattle.jpg