Australia's 90CL beef price hits record high in Feb on strong export demand

Australia's 90CL beef price rose to a record high of $6,445/mt on Feb. 20 and its average monthly price also achieved a new record of $6,312/mt, as a surge in demand from the US for lean beef trimmings significantly outpaced supply.

Platts, part of S&P Global Commodity Insights, assessed 90CL beef FCA Australia at $6,319/mt on Feb. 28, up 2.6% from $6,157/mt on Feb. 3. The price hit $6,445/mt on Feb. 20, surpassing the previous peak of $6,325/mt recorded in July 2024 by 1.9%.

As February concluded, market sources reported a softening in demand and consumption amid the higher prices of lean beef trimmings. Consequently, prices for Australian 90CL beef decreased slightly. Nevertheless, the average monthly price for February still achieved a new record at $6,312/mt, a 2.7% increase over the last highest monthly average of $6,145/mt in August 2024.

With the limited domestic supply of 90CL in the US, Australia, New Zealand and Brazil emerged as the primary suppliers, according to market sources. However, Brazil had already filled its tariff-free quota for this year as of January, sources said.

As demand remained robust, market sources indicated that offer prices were rising, with bid prices exceeding $2.98/lb. Higher prices are expected in the coming months, particularly as the US gears up for peak demand for grinding beef in May, coinciding with the Memorial Day holiday.

Widespread rainfall in Queensland early in February, which resulted in flooding and road closures, further impacted the market. Due to the favorable conditions, many packers opted to retain cattle for grass grazing, leading to a decrease in turnoff rates.

According to data from the Australian Department of Agriculture, Fisheries and Forestry, beef exports reached 117,502.1 mt in February, a remarkable 45% increase compared to January and a 25.2% rise year-over-year. The US remains the largest export destination, accounting for nearly 30% or 35,092.3 mt of total beef exports. This is a 42.2% jump from January and 64.4% higher year over year.

In the US, 109,500 head of bulls and cows were processed in the week ended Feb. 15, down 3.2% week over week and 17.7% year over year. This is also 2.2% below the six-week average, according to the US Department of Agriculture Cattle Weekly Slaughter report on Feb. 27.

The decline in cow slaughter rates is particularly significant, as these animals are the primary source of lean trims. The USDA forecasts that this limited supply of lean processing beef will keep the US market attractive for exporters.