Beef Trading Hit by Hurricane Sandy05 November 2012
US - As Hurricane Sandy lashed the New York and New Jersey areas last week, business trade was impeded, according to reports from Meat and Livestock Australia.
With US end-users and importers unable to assess the full impact of the hurricane on business, trading volumes were reportedly light. Imported beef prices were steady to slightly higher this week, averaging 202US¢/lb CIF (402.2¢/kg FAS).
Port Philadelphia, the largest port of entry for imported beef, was opened for business one day after the hurricane hit, with damage to facilities reportedly not significant. So far there has been no report of any damage to processors or cold storage facilities, although the disruption to regular business is expected to continue.
Some US end-users have reportedly focused on the immediate need of locating inventory, along with assessing the damage from the storm, and therefore not looking to secure for supply forward. However, the economic damage of the storm is expected to be significant.
Steiner Consulting Group estimates US domestic lean grinding beef price could be in the 240-250US¢/lb range next year, as the weak fat trimming prices may allow more upward movement in the lean and extra lean beef values.
While the high lean beef trimming prices will continue to be fundamentally driven by the record low cow herd, high value for round cuts coming from finished cattle should also limit 90CL beef supplies for grinders. Reportedly, US cattle futures continued to imply increased round cut values in 2013.
On the other hand, the US imported prices is expected to continue trading at a discount to domestic lean beef in 2013, in part due to increased supply from Australia and New Zealand, as well as US retailers’ reluctance to include imported in fresh ground beef packs.