Mexican cattle imports through July are 20 percent higher compared with the same period last year. Much of northern Mexico is still experiencing “severe to exceptional” drought, similar to Texas, especially states from which the majority of U.S. live cattle imports are imported, including Chihuahua and Sonora. This factor, along with U.S. feeder cattle prices that have averaged over $27 per hundredweight (cwt) higher this year (January-August) than comparable Mexican feeder prices, has fueled the increases in Mexican cattle imports. These lightweight cattle from Mexico have largely been placed directly in feedlots.

Imports of Canadian cattle, however, are 41 percent lower year-over-year, and that decrease is more than offsetting the increase in imports of Mexican cattle. The U.S.-Canadian slaughter cattle price differential has narrowed since June, but has seldom been above year-earlier levels. Total U.S. cattle imports through the first half of the year are 12 percent lower than the same period a year earlier. This year, 2.15 million head are forecast to be imported—6 percent below 2010; 2.05 million head are forecast to be imported next year, with the decrease also a function of tight inventories in Canada and Mexico.