THE WA beef industry is feeling the pinch of lower beef exports, occuring as the United States cattle herd expands.
Following the US presidential election last week, Sequoia Agriventure and Agricultural Connections Australia director Steve Meerwald said there was some uncertainty in the beef processing market.
"It is hard to tell so early, as there was a lot rolled out in the US presidential campaign that may not come to fruition," Mr Meerwald said.
"There is likely to be some impact on global trade.
"What the impact will be is hard to tell."
Mr Meerwald said it was a matter of being cautious and waiting.
"All export processing is quite challenged at the moment, with a significant increase in competition as well with other markets,'' he said.
"There is some real pressure on processors, that's likely to continue.
"We have seen the Australian prices continue to rise over the past six months, as international prices have come down and that hasn't created a lot of joy."
Mr Meerwald said there would be a price correction.
"It does look reasonably buoyant for Australian cattle prices, even though they will come off, they will still be at comparatively high rates," he said.
"There will be a short-term correction, but the pressure on supply is still strong and likely to stay that way.
"I think we have probably seen the highs and everyone will be a bit more cautious and have a watch and see approach."
According to Meat and Livestock Australia (MLA), the US remains the fourth largest beef producer in the world, producing 10.8 million tonnes cwt of beef in 2014, following India, Brazil and China.
On November 10, MLA reported US imported beef prices moved modestly lower from last week's levels, underpinned by increased offerings from New Zealand, attributed to the seasonal rise in slaughter.
In the weekly update commissioned by MLA, the Steiner Consulting Group reported that the imported 90CL beef indicator eased 2.5US cents from week-ago levels, to 196.5USc/lb CIF (down 10.9c, to 562.8c/kg CIF) but compared to the same time last year, the indicator is up 7USc.
Australian beef supplies remain extremely limited, and imported offerings on the spot market are particularly tight.
US end users requiring significant volumes are likely to be sourcing requirements from the domestic market or, in order to maintain relationships with regular suppliers, be willing to pay a premium to secure imported product.
MLA reported that in recent weeks much has been noted about the supply situation, but there were also several demand drivers that Steiner Consulting Group reported as having a considerable affect on the imported beef market.
The first was consumer incomes. Real per capita disposable income growth has been trending lower over the past three months, compared to last year.
Steiner Consulting suggested this may have reduced demand over the US summer and early autumn, however income growth is expected to pick up in the coming months.
Secondly, prices for competing proteins such as pork and chicken were expected to remain low for the next six months, which will maintain pressure on grinding beef values.
Grinding beef demand was sensitive to foodservice business in the US.
The report suggested that restaurant trends, in relation to foot traffic, were weaker in September compared to the same period last year.
Western Meat Packers chief executive officer Andrew Fuda said processors in WA and nationally had been doing it "tough" already.
"The US market has been a tough market for us in the past six months," Mr Fuda said.
"It has been very hard for us to secure numbers this year in WA, due to our shrinking herd size, compared to previous years.
"America is doing well itself, in terms of its herd size and Brazil has a quota into the US, which is competitive and has really thrown us around.
"Our prices have come back and shipments into the US are declining from the whole of Australia."
The Steiner Consulting Group US Imported Beef Market report last week reported that prices were for the most part steady in the US.
, but some market participants also indicated that CIF values seemed to pull back a little after several weeks of steady gains.
"Exchange rates have been extremely volatile in the past 24 hours following the results of the US election," the report said.
"There was some speculation about a weaker US dollar as participants thought FED would not raise rates.
"That speculation being discounted following the rally in equities."
Mr Fuda said WA processors had been finding boxed beef more difficult.
"We will probably continue to see that going forward," he said.
"But it's not just the US, it's all global markets."
