Both U.S. beef exports and imports have reflected the global macroeconomic situation in recent months along with unique factors affecting the domestic situations for many of our trade partners. Total beef exports were up 5 percent for the year to date through April, though that increase reflects U.S. access to South Korea in mid-2008. Exports thus far in 2009 to Mexico and Canada, the top two U.S. beef destinations, were down 19 and 15 percent, but up 19 percent to Japan. Excluding South Korea, beef exports for the year would be down 4 percent.
Slightly more encouraging news in the latest official data for April monthly exports to Mexico, Canada and Japan were all up slightly from the previous month. However, April exports were down sharply to South Korea and down slightly to Vietnam, the fifth largest export market recently. Most export markets are struggling with weak macroeconomic conditions and have struggled with exchange rates as well. The strength of the U.S. dollar against many currencies in late 2008 and the first quarter of 2009 made U.S. beef more expensive and negatively impacted exports. The dollar has weakened since March and should help support beef exports in the second half of 2009. Mexico has been particularly hard hit with a recession and weak currency combined with the H1N1 influenza outbreak that decimated the spring tourist market so important in Mexico.
Beef imports have likewise been impacted by many of the same factors. U.S. beef imports through April were up 15 percent, the result of sharp increases in imports from Australia and modest increases from most other sources. Imports of Australian beef were up 55 percent in the first four months of the year as a result of drought recovery in Australia; reduced Asian demand for Australian beef; the strong U.S. dollar making the U.S. a more attractive market; and the generally strong market for processing beef in the U.S. Imports of Australian beef will likely moderate in the second half of the year with the weaker U.S. dollar and a weaker processing beef market in the U.S. Prices for beef trimmings, used primarily for ground beef, dropped in June due to increased cow slaughter, driven by dairy cow liquidation; and abundant supplies of imported processing beef.
Cattle imports through April were down 11 percent, with decreases in Canadian cattle imports offsetting an increase in Mexican cattle imports relative to a year ago. Canadian cattle imports have decreased since late 2008 reflecting the fact that total Canadian cattle numbers have finally decreased back to pre-BSE levels in 2003. Canadian cattle imports will likely remain muted, although emerging drought conditions in the Canadian prairies could force some additional cow liquidation and increase in cull cow imports from Canada in the coming weeks. Imports of Mexican cattle have been higher relative to last year’s low levels so far in 2009. This is driven largely by the weak Mexican Peso in the first quarter and subsequently by the weak domestic economy in Mexico. Moderation in the exchange rate, combined with adequate forage supplies will likely result in moderating Mexican cattle exports in the second half of 2009. Annual cattle imports from Mexico may be higher than last year but will likely remain below historic levels.
Source: Derrell S. Peel, OSU Extension Livestock Marketing Specialist