U.S. beef imports surged during July, bringing this year’s cumulative total through July to 1.627 billion pounds, 15 percent higher than a year earlier. Imports from Australia totaled 97.0 million pounds during July, 71 percent higher than July 2013 and the highest single month total from Australia since April 2009. Imports have also increased notably this year from New Zealand (up 8 percent), Canada (up 11 percent), and Mexico (up 11 percent) (see figure). Demand for imported processing beef has been strong this year due to declining U.S. beef production. Through August 30, 2014, federally inspected cow and bull slaughter is down 13 percent from a year earlier, leading to lower domestic supplies of lean beef. Imports were up only 1 percent during the first quarter but have increased steadily since March. Higher imports have been facilitated by higher production this year in Australia. Drought has persisted in Australia’s cattle-producing regions, leading to an 11 percent increase in cattle slaughter through July. Beef production has increased 9 percent, offset somewhat by lower weight animals. Pasture conditions have improved in New Zealand this year, leading to a reduction in cattle slaughter. However, New Zealand beef exports are up 6 percent year to date, with the United States accounting for just over half of exports. The forecast for U.S. beef imports in 2014 was raised to 2.684 billion pounds, an increase of 100 million pounds. The forecast for 2015 was also raised to 2.700 billion pounds. Strong import demand is expected to continue throughout the forecast period due to lower U.S. beef supplies and strong U.S. beef prices expected to draw supplies from abroad.

 

 

 

 

 

 

 

After increasing in each of the first 6 months of 2014, U.S. beef exports cooled during July. Exports fell 13 percent from the previous year’s level, largely due to lower shipments to Canada (down 26 percent) and Hong Kong (down 32 percent). July’s downturn in exports indicates that higher U.S. beef prices are beginning to impact trade (see figure). The average price of boxed beef was almost 30 percent higher in July 2014 than a year earlier. Exports to Canada in particular have fallen this year (down 22 percent), further impacted by a weaker Canadian dollar. Despite considerably higher prices, U.S. exports through July are still marginally above last year’s level. Demand has been robust from Asia, including higher cumulative-year exports to Hong Kong (up 36 percent), South Korea (up 22 percent) and Taiwan (up 9 percent). Shipments are also up 24 percent to Mexico, making it the second largest market for U.S. beef. Japan remains the top market, although shipments have been lower than a year ago. Japanese imports of beef from all countries are down almost 9 percent this year, but the United States has increased its market share at the expense of imports from Australia. The forecast for U.S. beef exports in 2014 is 2.620 billion pounds, 1 percent higher than 2013. Exports are expected to decline in 2015 to 2.525 billion pounds as high prices are expected to weaken export demand.

Source: USDA Livestock, Dairy, and Poultry Outlook