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 conditions 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.

Mexican pasture has experienced drier conditions recently, after adequate precipitation in the spring and early summer. Mexico sends almost exclusively feeder cattle to the United States, to be fed in U.S. feedlots and stocker yards. If there is little moisture in the late summer or early fall, Mexican cattle could be sent to the United States earlier in the fall. However, if rainfall allows for good pasture conditions, Mexican cattle could remain in Mexico longer. Good pasture conditions at the end of 2008 led to very low imports in the third and fourth quarters of last year, followed by a surge in early 2009. Imports of Mexican cattle have been about 22 percent higher this year through July, compared with last year’s particularly low base.

Conversely, imports of live cattle from Canada have been lower than last year. Through July, cattle imported from Canada are 32 percent below 2008 quantities. Last year, a combination of high feed prices and a strong Canadian dollar meant that U.S. feeders were providing better returns for Canadian producers marketing feeder animals. However, the Canadian dollar weakened against the U.S. dollar in late 2008 through March of this year, as a result of the financial crisis. Additionally, decreased demand for beef has lowered fed cattle and feeder cattle prices in the United States. Although the Canadian dollar has strengthened considerably since March, lower demand for beef has not supported the same kind of returns as last year for Canadian feeder cattle.

Source: Livestock, Dairy and Poultry Outlook, USDA