US - In the beef business, so far all seems to be in good shape and yet cattle futures markets have very reluctantly come along for the bullish ride that is consuming the product market, according to Steiner Consulting Group, DLR Division, Inc.
Beef exports are excellent, evidenced in the weekly export data reported by USDA and also in the number of loads sold for export reported as part of the Mandatory Price Reporting system.
One piece of news that came out this morning is that China has temporarily suspended beef imports from Brazil. The decision appears to follow the widening scandal in the Brazilian meatpacking industry.
China does not allow beef imports from the US so the US does not appear to benefit from this (temporary) change in Chinese policy. However, we would argue that this move does indeed support US beef exports.
Almost a third of all Chinese beef imports in 2016 came from Australia and New Zealand, two countries with which we compete vigorously in the Japanese and South Korean market. As Chinese buyers start to compete more aggressively for Australian beef, this will make life more difficult for Japanese and S. Korean buyers and shift more of that demand towards US products.
Already we have seen this happening and the announcement could further exacerbate the situation. It could be that the Chinese decision is short lived and as Chinese officials learn more about the situation they may opt to resume trade again.
However, if the scandal in Brazil deepens and reveals wider cracks in its food inspection regime, China may opt for a longer lasting policy. We don’t know how this will play out but it is one of those issues that bears watching.
As for the US beef imports, it is important to point out that the supply of fresh/frozen Brazilian beef entering the US remains minimal at this point. Most Brazilian beef is fully cooked, with imports so far this year at just 800MT, 0.5 per cent of the beef imported YTD.
TheCattleSite News Desk