2013 US Beef Shortage to be Met with Imports04 December 2012
US - After a summer of dry summer leading to pressure on grain supplies and pasture quality Meat and Livestock Australia report on the outlook for the States next in 2013.
Reflecting the gradual decline in US cow meat production, along with increased demand for lean beef trimmings, imported 90CL beef price hit an all-time high this week at 213US¢/lb CIF, reports Meat and Livestock Australia.
Higher prices are expected to continue towards 2013, particularly at the completion of the US seasonal cow turn-off in December and reduced cattle slaughter in Australia during holiday season.
Driven by the stronger lean trimming price outlook, CattleFax forecast US manufacturing beef imports in 2013 to increase by 250 million lbs (113,398 tonnes), with prices of 90CL beef trimming anticipated to average near 240US¢/lb.
In estimating the impact of the record low US cow inventory, CattleFax also estimated US non-fed beef production in 2013 to decline by about 500 million lbs (226,796 tonnes). The smaller domestic production is expected to be from around 800,000 fewer cows slaughtered next year, assuming improvement across some drought regions.
Despite continuously poor pasture conditions since June 2012, US domestic cow meat supplies have remained under year ago levels. Weekly US cow slaughter during the four weeks to 10 November declined 4 per cent year-on-year, to average 139,469 head. The fall was entirely driven by the 11 per cent decline in beef cow slaughter, due to cow-calf producers’ effort to retain the breeding herd.
Feeder cattle prices trading at above 140¢/lb cwt over the past three months and futures feeder prices at 158US¢/lb cwt for November 2013 delivery should continue to provide an incentive for US cow-calf producers to try and sustain their breeding herds in 2013.
In contrast, the US dairy cow slaughter has undergone rapid liquidation over the past year, with turn-off up 6 per cent year-on-year over the four weeks to 10 November. As a result of the increased turn-off and poor margins experienced by dairy cow producers during 2012, the US dairy cow herd is expected to decline to 9.125 million head in 2013, down from from 9.225 million head in 2012.