Import numbers decline in 2008

Cattle Market & Farm Reports, Editorials
Dec 2, 2008
Import numbers decline in 2008
U.S. imports of cattle and beef from foreign countries are on track to drop 12 percent from 2007 levels according to reports from USDA’s Agricultural Marketing Service (AMS). According to the most recent data, released Nov. 13, live cattle imports into the U.S. are expected to fall to 2.2 million head, with the bulk of that total coming from Canada and Mexico, although those imports are down sharply this year. According to AMS figures, imports of feeder cattle from Mexico have fallen 43 percent from last year through Nov. 1. According to the report, excellent grazing conditions, which have persisted for much of the year after good summer rains, have allowed producers south of the border to hold onto cattle which would normally have been shipped to the U.S. for feeding. Mexico’s economy has also been showing signs of improvement this year as growth in the U.S. slowed, allowing consumers south of the border to increase spending on domestic beef purchases.

Imports of fed cattle from Canada have fallen from 2007 levels as a result of the stronger Canadian dollar for the first half of 2008 which made imports less attractive for U.S. buyers when combined with the high cost of shipping during the first two quarters of the year. However, the recent rise in the value of the U.S. dollar in comparison with the Canadian dollar has made purchases of Canadian beef more attractive, spurring interest from U.S. buyers and increasing the volume slightly. For the year though, imports of Canadian slaughter cattle were reported by AMS at 556,903 head, down 20.2 percent from the 697,620 head for the same period in 2007. The additional requirements generated by Country of Origin Labeling have also reportedly played some role in driving down interest in importing Canadian cattle, although that information cannot be verified easily and is unlikely to become a major factor in international trade under current regulations.

Despite the overall decline in imported Canadian cattle bound for immediate slaughter, there has been a sharp increase in the number of feeder cattle this year, despite declines in volume in recent weeks. According to AMS data, Canadian feeder cattle imports for the year to date are up 24 percent from the year ago total, rising to 512,462 head, up from 413,234 head from last year. For the week ending Nov. 1, 2008, imports of feeder cattle into the U.S. totaled 10,095, down from 11,712, the prior week, largely a result of in- crease in prices being offered north of the border. Alberta steers rose more than $7 per cwt. from the previous week to trade at $82.42 last week, while steers from Ontario showed a $10 gain to $82.51.

The border opened to imports of slaughter cows and bulls from Canada on Nov. 19, 2007, so no trend is available from last year. However, the year-to-date total for the class stood at 161,057 head on Nov. 1, 2008. Numbers of slaughter cows and bulls are expected to show some increase in coming weeks as Canadian producers cull animals from their herds. In the U.S., demand for cow and bull beef is high and slaughter volume has been high for much of the year amid higher than normal pricing and consumer demand, adding to the incentive to ship cull animals to the U.S. AMS projected that imports of cattle from foreign countries are likely to decline farther to reach 2.1 million head in 2009 although the current economic situation and the currency exchange rate will play a significant factor in demand and the actual number of animals imported. The demand among packers and their profit margins will also play a role in determining demand in the year ahead, said AMS analysts.