CME: Weak Beef Imports Negatively Impact Demand11 September 2009
US - Len Steiner and Steve Meyer write that while the flu issue remains a short term factor for US pork demand, US beef demand has been negatively impacted this year not just by slow sales at foodservice but also weaker US beef exports.
The most disappointing has been the Korean market, which was the focus of much debate last year. Sales to Korea rose sharply in Q3 of last year as beef trade resumed.
Since then, however, US beef exports to Korea have slowed down, negatively impacting overall beef exports. Weekly shipments of beef muscle cuts to Korea in August were on average 725 MT per week, compared to an average of 3031 MT last year, a 76 per cent decline. Part of the reason for the slower sales is that last year we saw a big rush of orders as Korean buyers were looking to fill the pipeline. Also, the currency has only recently begun to recover. As the bottom chart below shows, for much of this year the Korean won was much stronger vs. the Australian currency (the top supplier of imported beef). A weaker US dollar should be helpful but we have still some ways to go as the Won still is down some 15 per cent since 1 July 2008 vs. the US dollar.
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