U.S. Beef exports increase by 21 percent in 2011

Mar 2, 2012

U.S. beef exports in 2011 posted a 21 percent yearover-year increase. Beef exports for 2012 are forecast at 2.76 billion pounds, fractionally below 2011 levels. U.S. beef imports were 10 percent lower than yearearlier levels; the U.S. remained a net exporter. Beef imports for 2012 are forecast at 2.09 billion pounds, 2 percent higher than 2011.

U.S. beef exports posted strong gains in 2011. Total beef exports were 2.79 billion pounds, 21 percent higher than the previous year’s totals. The strongest gains were to Russia ( 85 percent), South Korea ( 37 percent), Japan ( 30 percent), Canada ( 27 percent) and Hong Kong ( 21 percent).

Canada and Mexico, however, were the top beef export destinations for the U.S. Japan and Korea were the third and fourth export destinations for U.S. beef, respectively. Together, these four countries imported 65 percent of total U.S. beef exports. Beef exports in 2011 were also 11 percent higher than pre- BSE export levels; however, exports to Japan and South Korea were only 50 and 65 percent of pre-BSE levels (2003), respectively.

U.S. beef exports for 2012 are forecast at 2.76 billion pounds, fractionally below 2011 levels. Bullish market conditions for the beef export market are expected to continue in 2012, driven by several factors: slow growth in worldwide cattle inventories, relatively stronger economic growth in Asian countries, and favorable exchange rates for foreign purchasers.

U.S. beef imports 10 percent lower in 2011

For much of 2011, the U.S. beef imports can be summarized as constrained by Australia and New Zealand’s efforts to rebuild their cattle herds and, subsequently, lower quantities of beef available for export from Oceania; a relatively weak U.S. dollar, making prices of foreign imported products higher; and continuing strong demand for beef in global markets.

Total 2011 U.S. beef imports were 10 percent lower than year-earlier levels, making the U.S. a net exporter of beef in 2011 by 32 million pounds. Canada was the top supplier of beef to the U.S. on a quantity basis in 2011, providing one-third of total U.S. beef imports. Imports of Canadian beef, however, were 20 percent lower year-overyear. Australia and New Zealand were the second and third largest exporters of beef to the U.S., although nearly equal quantities were imported from these countries; approximately 22 percent of total U.S. beef imports were imported from each country. Yearover-year imports from Australia were 20 percent below a year ago, compared with 3 percent lower for New Zealand.

Imports from Mexico and Central America (Nicaragua, Costa Rica and Honduras) were higher yearover-year by 44 and 27 percent, respectively, as these countries captured market share from Australia and New Zealand. Beef imports from Brazil, Argentina and Uruguay remain at considerably lower levels compared with previous years. Primarily, limited supply has hampered beef exports for Uruguay and Argentina; thus, these countries have generally reduced shipments to all markets, including the U.S. Brazilian-U.S. beef exports (processed beef only) are expected to continue to recover, as they have been since trade resumed midyear 2011.

Beef imports for 2012 are forecast at 2.09 billion pounds, or 2 percent higher than 2011. While beef production, and subsequently exports from Australia and New Zealand, is expected to increase this year, growth will be limited by producers retaining stock for breeding purposes. Weather and forage conditions in Australia will be among the primary determinants for cattle slaughter levels and thus for exportable supply. Export returns were lowered in 2011 by the strength of the Australian dollar, and the exchange rate will also be a factor in determining to which countries will be more competitive in bidding for product in 2012.

Given the herd rebuilding efforts that are already underway in Canada, exports from Canada will be also be constrained, but there is still expected to be significant Canadian incentive to export because of U.S. demand for processing beef. With the apparent supply constraints among the major U.S. beef trading partners, Mexico and Central American countries should continue to pick up some of this slack.

U.S. cattle imports 8 percent lower in 2011

U.S. cattle imports for 2011 totaled 2.1 million head, marking an 8 percent decline from yearearlier levels. Despite a diminished total North American cattle inventory, U.S. cattle imports could have been much lower had it not been for drought extending into Mexico and prompting producers there to market cattle in the U.S. Cattle imports from Mexico were 16 percent higher year-over-year, but the increase was not enough to offset the 35 percent decline in Canadian cattle imports.

Herd rebuilding has been underway in Canada as cows imported for slaughter declined by 39 percent compared to imports of all cattle for slaughter (-31 percent). The increase in Mexican cattle imports was solely attributed to increased imports of lighter weight feeder cattle (less than 400 pounds). Many of these calves directly entered feedlots due to strong U.S. demand and drought conditions that limited grazing options in the Southern Plains.

U.S. cattle imports in 2012 are forecast to be 2 percent lower, at 2.05 million head. Severe-to-exceptional drought conditions are still present, extending into northern Mexico, where feeder cattle imports to the U.S. primarily originate. U.S. import levels should thus remain elevated from Mexico at least through the first half of the year. Cattle numbers and calf production are expected to expand slightly in Canada this year, increasing the availability of fed cattle for export (and immediate slaughter), particularly in the second half of the year. In the last five years, cattle over 700 pounds for immediate slaughter averaged 70 percent of total Canadian cattle imports. Imports of cows for slaughter from Canada should remain at lower levels as Canadian producers continue to hold back breeding stock as they expand herds. — Rachel Johnson, USDA