August 24

8/24 – WEEKLY COMMODITY SUMMARY:

• In Friday’s monthly cattle report, the USDA said feedlot inventories on Aug 1st were 11.12M head, up 1.8% from a year ago. However, new placements onto feedlots in July were 11.0% below last year, and cattle marketings were down 7.4%. It’s a continuing saga of less available cattle and fewer cattle sold.

• But this report is a big yawn in light of the Trump Administration’s announcement that it will allow 300,000 metric tons of beef (661M lbs) to come into the US duty-free over the next 90 days. U.S. import duties on most foreign beef is 26.4% once the annual quota is exceeded. But in terms of price, even allowing for the duty, 90% lean trimming imports are still $1/lb less than domestic.

• So, the duty-free beef probably won’t add much volume to this year’s U.S. imports, but it should pressure trimmings prices lower. Expect to see some featuring at the retail level, but it’s too temporary a measure to change menu prices at restaurants.