News

U.S. beef prices see indirect benefit from increased Chinese demand

Reduced imports of lean beef trimmings from Australia and New Zealand have helped push U.S. cattle prices higher.

Rabo AgriFinance animal protein analyst Don Close says Australia and New Zealand have been shipping more beef to China, which has caused a significant drop in their shipments of lean beef trimmings to the U.S.

“Imports of New Zealand beef trimmings into the states have been off roughly a third this year,” Close says, “and we’re expecting to see those shipments down another third in 2020, just because of the volume of trade going to China.”

Close says the reduced imports of “manufacturing beef” have led to sharply higher prices, forcing fast food burger restaurants to use more domestic beef.

“It’s forcing U.S. grinders—U.S. patty manufacturers—to buy lean muscle cuts out of our fed beef supply that has been very supportive to beef cutout values over the last 30 to 60 days. That is only going to intensify this coming year.”

Which could help push U.S. beef prices in 2020 to levels higher than they otherwise would have been, Close says.

Close spoke with Brownfield at the recent annual meeting of Nebraska Cattlemen.