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US Beef Market Steady - Japanese Stocks Tighten

22 March 2013
Meat & Livestock Australia

GLOBAL - The US imported beef trade was steady, to slightly lower this week, as lean trimmings prices continued to be pressured by ongoing high New Zealand suppliers, according to analysts at Meat and Livestock Australia.

Increased fat trimming prices, following reduced domestic fed cattle slaughter, also contributed to a stalling in prices offered for lean beef. The US imported lean grinding beef price indicator declined 0.5US¢ this week, averaging 202US¢/lb CIF (403.3¢/kg FAS)

While imports of Australian beef into the US up to 18 March 2013 were steady year-on-year, volumes from New Zealand surged 43%. With the drought declared in New Zealand’s North Island and seasonal conditions in South Island deteriorating, high cow slaughter in New Zealand is expected to continue over the short term.

Much of Australian beef exports to the US this month will be market ready in April, just in time for the spring grilling season, MLA said.

Although shipments to the US so far this month have tracked below year ago levels, strong demand from other markets continues to drive shipments of Australian beef.

Weaker Yen Tightens Beef Stocks in Japan

The Japanese beef trade reported tightening stocks of imported beef in the wholesale market this week, accelerated by the depreciation in the Japanese yen.

In the chilled beef sector, the warming weather somewhat improved demand for grilling beef items, with Shokuniku Sokuho speculating strengthening in prices prior to upcoming Golden Week holiday season (end of April – early May), MLA said.

Frozen beef inventories have also been pressured by the currency situation and firm offer prices from both Australia and the US, resulting in popular items such as US chuck roll not being quoted in the weekly wholesale report.

In the wholesale offal trade, end-users have been cautious with tongue items, as they anticipate the arrival of lower priced products in coming weeks. Australian frozen tongue averaged 1,025 yen/kg this week, down 24 per cent from a month ago but still 15% higher than the same week last year.

Increased Interest in Australian Beef in Korea

Korean weekly wholesale prices for Australian beef remained steady this week, but traders’ interest in Australian product was reportedly heightened, the MLA analysts said.

In particular, chuck roll attracted more interested from traders, largely due to low stock levels and lingering concern over increased global competition. Australian chuck roll prices this week were KRW 8,100 – unchanged from last week but 5% higher than the start of this year (KRW 7,700).

US short rib prices continued to gradually decline from mid-January levels, with this week’s prices down another 2% from the previous week, to KRW 13,000.

Hanwoo wholesale carcase prices slightly recovered from last week, to KRW 12,114, while pig carcase prices were down 4% on last week, to KRW 3,006.

Large discount stores will run special discount promotional campaigns to support local beef and pork producers and aim to increase consumption. However, a Korean media report suggests that the decreased Hanwoo and pork prices have not assisted the increase in beef and pork consumption in Korea.

Average beef purchase volume per family for four people decreased from 1.46 kg per household in 2011 to 1.39 kg in 2012 MLA said that Herald Business reported.

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