U.S. imports of beef in the first quarter totaled 573 million pounds, a 19-percent decrease from the same quarter last year. This decline should carry over into the remaining quarters of 2010, as total U.S. beef imports for this year are forecast at 2.5 billion pounds, a 5-percent decline year-over-year. Tight exportable supplies
from Oceania, coupled with a weakened U.S. dollar relative to Oceania currencies, are the primary contributors for declining U.S. beef imports.

First-quarter beef imports from Australia and New Zealand were down 41 and 18 percent, respectively, from the same quarter last year. Indicative of lower  exportable supplies, the Australian Lot Feeders’ Association and Meat and Livestock Australia report indicated the lowest number of cattle on feed in first quarter 2010 since the last quarter of 2008. Coupled with these tightened exportable supplies is the strong Australian dollar, which is raising prices in U.S. dollar terms. In April the Australian dollar matched a high of 1.06 AUD/USD in its current uptrend, beginning early 2009, and remained near this mark throughout the month. To the extent the Australian dollar remains strong, importers will be forced to pay relatively high prices for Australian beef; however, any weakness in the currency could benefit importers. Upward price pressures for lean processing beef, as is imported from Australia, has been clearly evident in the domestic wholesale beef market, which shows no sign of weakening, at least in the near term.

Imports from our North American trading partners were up for first-quarter 2010, but not enough to offset declines from Oceania and South America. Most important, first-quarter beef imports from Canada were up 5 percent year-over-year. U.S. beef imports in 2011 are expected to total 2.79 billion pounds, almost a 12-percent increase year-over-year, a reversal of the decline in beef imports forecast for this year.

Source: ERS/USDA