Market news with Peter Greenham
Commodity trim prices pulled back more than $1/kg in November. With China experiencing their first recession in more than 40 years, countries that traditionally supply China, like New Zealand, are redirecting their meat into the US, eating into our market share. Ongoing drought conditions throughout America’s breeding regions also means their domestic kill is still quite high, leaving their domestic market inundated with fresh trim. All this, combined with heavy shipments of trim coming into the US from Brazil is placing downward pressure on imported commodity beef, both in volume and price. There’s still a lot of imported product sitting in freezers waiting for prices to correct.
Conversely the proportion of prime meat available in the US is down given time on feed has started to pull back, which is helping sales for premium cuts like high marbled loins going into high-end restaurants. This has given us incentive to direct more cuts into premium US markets, where prices are holding strong.
High interest rates in Korea are having a big impact on the consumption of high-quality beef, bringing our high-end chilled programs to a grinding halt. Any imported chilled beef being purchased in Korea at the moment is being frozen down on arrival under the assumption that that it won’t be able to be sold within its shelf life. This is impacting our grainfed programs and prices for popular Korean cuts like chuck rolls, oyster blades and flat meat, which make up a large percentage of the carcase.
Japanese importers are watching closely what is happening in America and putting very low bids out to opportunistically purchase cheap trim. We expect this to continue for the next few months into early 2023.
Aus domestic market
While it has been a sluggish few months on the back of high interest rates at home in Australia, premium loin cuts have started to move well again in the lead up to Christmas with food service ramping up. Secondary cuts however are pulling back at a similar rate to what we’re seeing in export markets.
Limited container availability and shipping bottlenecks have defined the past few years for exports but there seems to be some light at the end of the tunnel. The rotation for the number of vessels shipped to the east and west coasts of America has increased and shipping lines are expecting that trend to continue into 2023. At one stage we were seeing delays of up to two to three weeks at Oakland and Long Beach on America’s west coast but they’re now back to three or four days, which means more frequent sailing available for us.