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Australia frozen boxed beef: Processing recovers

  • : Agriculture
  • 25/03/14

Many processors in southeast Queensland are focused on recovering lost production after Tropical Cyclone Alfred. Trading across beef trim and most cuts was subdued as potential trade tariffs weigh on markets, and second-quarter negotiations continue between Australian processors and Asian customers.

The Port of Brisbane and all processors in southern Queensland and northern New South Wales (NSW) have resumed trading and restarted cattle processing. They lost processing days because of the cyclone's landfall, power outages, container shortages, labour mobility constraints, and limited shipping availability. Processors are scheduling extra weekend shifts and prioritizing grain-fed orders to reduce feedlot backlogs. They are also taking stock rather than offering volumes of some products, such as Australian 65CL frozen beef, because of limited unsold volumes.

Cow prices at Queensland's major saleyards, Roma and Dalby, fell because of lower demand for grassfed cattle. Cows weighing 500-600kg at the Roma store sale sold at an average of 276A¢/kg. The lower demand is expected to be short-lived, especially as southern processors are already sourcing cows from Queensland paddocks.

US demand continues to lead most lean trim prices, but sales to Canadian importers emerged this week, including some loin sales. This is in response to US tariffs, with a significant movement by Canadians to boycott all US-manufactured products, including beef, market participants said. Australia's competitive prices compared with US domestic beef are also making it an attractive option for Canadian consumers.

The Australian 85CL frozen beef price fell by A$0.19/kg to A$9.42/kg. Bids, offers, and trades ranged from A$9.20/kg to A$9.94/kg. Offers fell below A$10.00/kg for the first time in a few weeks.

The Australian 100-day grainfed navel end brisket price rose by A$0.52/kg to A$9.98/kg, offsetting the previous week's decline. Bids, offers, and trades ranged from A$9.51/kg to A$10.20/kg. This cut is being sold to Japan because of peak season demand for thin slice. The Australian 100-day grainfed chuck roll price rose by A$0.18/kg to A$12.14/kg. Bids, offers, and trades ranged in A$11.30-12.67/kg, with Korean buyers accounting for most of the volume.

Chuck roll and navel end brisket are two cuts that US processors export in large quantities to Asia. Market participants say that any further trade barriers with China could divert these cuts to other countries in southeast Asia.


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