Stronger Canadian feeder shipments spur growth in cattle imports

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U.S. cattle imports through April 2014 totaled 846,943 head, 5 percent higher than a year earlier. Imports have grown from Canada (+12 percent) due to rising shipments of feeder cattle. Strong U.S. prices for cattle due to lower inventories have created incentives for Canadian producers to ship cattle south. U.S. feeder cattle prices accelerated rapidly in the second half of 2013 and continue to grow (see chart).

Prices for Canadian feeders grew more slowly during 2013, and a widening price differential between U.S. and Canadian feeders increased demand from U.S. buyers. Canadian prices have accelerated more rapidly in 2014, closing some of the gap between U.S. and Canadian prices. A weaker Canadian dollar also supports U.S. imports. Over the past 12 months, the Canadian dollar steadily depreciated against the U.S. dollar and has averaged 10 percent lower throughout most of 2014.

Through April, feeder cattle imports were up 33 percent, while imports of slaughter cattle—accounting for over half of all imports—were down 3 percent from last year. Cattle imports from Mexico have fallen 2 percent this year despite prices well above previous years. Lower Mexican cattle inventories limited imports in 2013 and continue to constrain imports this year. Due to the growth in imports from Canada, the forecast for U.S. cattle imports was raised to 2.05 million head in 2014 and 2.1 million head in 2015.

While demand for imported cattle is expected to remain strong throughout the forecast period, growth will be limited due to reduced cattle supplies.

See full USDA report here



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