While U.S. meat production has dropped off through most of this year, slower exports have left us with more-than-adequate domestic supplies, according to USDA’s monthly Livestock, Dairy and Poultry Outlook report, released Sept. 17.

Following are some key points from the report.

  • Through July, the United States exported 1 billion pounds of beef, nearly unchanged from last year. But the third quarter of 2008 had exceptionally high totals of beef exports that we’re unlikely to repeat this year, so annual U.S. beef exports are expected to fall 8 percent in 2009.
  • Japan remains a growing market for beef exports, with 2009 exports up more than 12 percent year-to-date. The Japanese yen has remained relatively strong making U.S. product relatively cheaper in Japan and more competitive with Australian beef products.
  • USDA expects 2009 beef imports to run 13 percent higher than last year. Imports from Australia have fallen from earlier in the year, as Australia ships more beef to recovering Asian markets.
  • Despite the favorable grazing season and crop outlook, current livestock price levels will keep positive profit margins elusive for the near term.
  • Increasing weights will contribute to total beef production, but may not reduced cattle slaughter. Retail beef prices may have begun to reflect lower wholesale and cattle prices.
  • Through July, live cattle imports were 16 percent lower than last year. The United States is expected to import 2 million head of cattle this year, more than a 12-percent decrease from 2008.
  • Weather could play a critical role for imports in the third and fourth quarters, as pasture onditions and forage supplies in the fall and early winter are important to feeder cattle coming off pasture in both Mexico and Canada. Generally, the fourth quarter of each year is when the most live cattle imports take place in the United States.
  • Imports of Mexican cattle have been about 22 percent higher this year through July, compared with last year’s particularly low base. Through July, cattle imported from Canada are 32 percent below 2008 quantities.
  • Based on current crop-production and price forecasts, the livestock feeding scenario for the next year is more favorable than in recent years. Favorable weather has also allowed an extended grazing season for most areas.
  • July 2009 placements of feeder cattle in feedlots of 1,000 head or more were 13 percent higher than July 2008. However, this was likely partially due to some later-than-usual retention on widespread good pastures, given that placements for the second quarter of 2009 were the second lowest since second-quarter 1996.
  • Breakeven costs at or near $89/cwt for cattle marketed during September are projected higher than the preceding months because of higher feeder cattle and feed prices last spring when cattle were placed.
  • Looking ahead, fed cattle prices, currently in the low- to mid-$80 range