USDA: Beef production to slow

Cattle Market & Farm Reports, Editorials
Mar 7, 2005
by WLJ
Beef production will be slower than expected after Canadian cattle are allowed back into the U.S. this month, the Agriculture Department said.
Cattle prices should remain relatively high because of competition between U.S. and Canadian packing houses, according to a report issued by the Agriculture Department’s chief economist.
Banned since the discovery of BSE in May 2003 in Alberta, live cattle imports from Canada are scheduled to resume on March 7.
“Based on increased slaughter of steers and heifers in Canada, U.S. packers will have to compete more aggressively for the pool of slaughter-ready cattle, somewhat dampening an expected decline in fed steer prices.”
Average prices for slaughter-ready cattle should be $80 to $85 per 100 pounds (45 kilograms), the report said. The 2004 average was $84.75.
Commercial beef production is estimated to be 25.7 billion pounds (11.6 billion kilograms) this year.
That’s 400 million pounds (180 million kilograms) less than the department had projected for 2005. The change was because Agriculture Secretary Mike Johanns decided not to allow meat from older Canadian animals into the U.S. on March 7.
Now, imports of meat as well as live cattle will be restricted to animals younger than 30 months. The brain-wasting disease is thought to pose less of a risk to younger animals.
The department also dropped its estimate for cattle imports, saying it expects Canada to ship about 1.3 million head to the U.S., not two million as previously projected.
Ranchers have been seeing near-record prices for cattle, and a ranchers’ group is suing to keep the border closed.
A meatpackers group is suing to open the border even wider, expanding what’s allowed to include older animals as well. Packers say the ban has cost the industry more than $1.7 billion in revenues. — WLJ