Rising beef prices fail to slow U.S. beef exports

Rising beef prices have not slowed U.S. beef exports, according to recent data from the U.S. Department of Agriculture. U.S. beef exports during the second week in March were the highest weekly total in more than a decade at 52,000 metric tons, the most since 96,044 metric tons were sold in December 2001.

Nearly a quarter of that week’s beef exports went to drought-hit Mexico, which bought 11,700 metric tons during the week ended March 15. South Korea, another major U.S. market, bought 10,600 metric tons.

Cash cattle markets traded from $124 to $129 during March, fully $12 to $15 per hundredweight higher than in March 2011. Supplies of market-ready cattle are tight, and weekly slaughter numbers are down, which leaves retailers and exporters competing for smaller supplies.

“There was a lot of sentiment out there that exports and these high prices for beef were definitely going to ration consumer demand,” Tregg Cronin, analyst with Country Hedging, told Reuters. “The fact that we had this impressive weekly export number kind of flies in the face of that.”

Domestic retail beef prices have hit consecutive record highs for five straight months through January, before easing back slightly in February.

Mexico’s drought has totaled more than a billion dollars in crop losses and cut the nation’s cattle herd. Mexico’s drought has also produced an increase in U.S. live cattle imports.

USDA’s monthly report put overall beef exports at 182.2 million pounds in January, down 4 percent from 2011. Mexico bought 38.2 million pounds in January, compared with 38.9 million pounds in January 2011.

Mike Zuzolo, president of Global Commodity Analytics and Consulting, told Reuters the hefty export increase was “surprising” given the U.S. dollar’s climb from its October lows. He said the beef export sales imply that the export markets are “completely insensitive” to the change in currency and speaks to how tight beef supplies are in the United States and globally.

“Mexico has come to the conclusion that their drought is significant enough and their feed grain prices are high enough that they don’t have the animals. Also, it probably would make a lot more sense for them to cool inflationary pressure on their meat sector by importing directly the meat and skipping trying to feed out anything that they have down there,” Zuzolo said.

Last year the United States exported nearly 1.3 million metric tons of beef valued at more than $5.4 billion.

1. YSA members gain insight into agribusiness, retail industries
2. Meat industry associations quick to attack the new MCOOL rule
3. Team up against bovine respiratory disease
4. Oil prices pare losses on U.S. equities turnaround
5. Future of food discussion with Agriculture Secretary
6. Ag markets diverged prove rather volatile on Thursday

1. Former Eastern Livestock CEO, CFO sentenced for federal crimes
2. Post-tornado composting a solution for disposal of dead livestock
3. Michigan hay buyers should plan purchases early
4. Seven jobs more dangerous than farming
5. New animal identification rules aid disease traceability
6. More beef cows in worst drought regions than a year ago

1. Commentary: GMOs: How do I hate thee?
2. Commentary: In praise of animal foods
3. Seven jobs more dangerous than farming
4. What’s on America’s grill this weekend?
5. New animal identification rules aid disease traceability
6. 4 rules for growing a business or industry