AUSTRALIAN manufacturing beef has hit a record-high price in the US.
But the strength of the Australian dollar has stopped the big prices being passed back to producers.
Last week, Australian 90 chemical lean grinding beef was making US208c a pound in the US, which saw returns to Australian exporters of 402c/kg.
And the gap between US-produced 90CL beef and Australian product narrowed to just a few cents.
Even with the big demand for Australian product, the strength of our currency has stripped the premium from the market.
Supplies of 90CL beef, which is 90 per cent muscle and 10 per cent fat, are tight in the US.
The drought in the US, combined with breeders' intentions to rebuild, has stripped supplies, forcing the US industry to look to more imports.
Tongala processor HW Greenhams and sons managing director Peter Greenham said prices were high for manufacturing beef in the US.
"Unfortunately this is not reflected in the prices we get due to the strength of the currency," Mr Greenham said.
He said producers were able to be paid more for cows five or six years ago, when the Australian dollar was lower, because the product was more competitive in the US.
"Any currency movement down would benefit both the processor and the producer," he said.
Meat and Livestock Australia chief economist Tim McRae said demand for manufacturing beef in the US remained strong.
"They have squeezed as much out of their own (cattle) market as they can, and they need more," Mr McRae said.
"The kinds of rates they are offering for Australian 90CL beef show just how tight supplies are in the US."
But he warned it was unlikely to have an effect on cow prices in Australia.
"Any flow on effects on our domestic cow market would be more dependent on the dollar," he said.
There were 414,000 less cows killed nationally last year, accentuating the shortage of cow beef for export.
Even with the currency's influence, Mr McRae said producers were still receiving good prices for their cows.
"Thanks to a good season across much of eastern Australia, cows are in their heaviest condition for many years," he said.