Red meat exports
The report was published by USDA’s Foreign Agricultural Service (FAS). The documents display data for March 2006. According to the recent report, U.S. exports of beef, as well as veal cuts and beef variety meats during March, increased nearly 21 percent from February, totaling 47,228 metric tons. This figure is up 48.5 percent from a year prior, when almost all Asian borders refused U.S. beef. In addition, exports of fresh product totaled 19,614 metric tons, up nearly 24 percent over February. Exports of frozen product also increased to 4,396 metric tons, which calculates into a 118.5 percent jump.
As Asian markets began to allow imports, the demand for “variety cuts,” such as tongue, liver, heart and tripe, drastically increased. During March, the U.S. exported 21,410 metric tons of beef variety meats. This was up 10 percent over the previous month and up 19.1 percent over March 2005. Through the first quarter of 2006 thus far, U.S. beef variety cuts exported increased 11.2 percent more than a year ago, totaling 62,804 metric tons.
Canada received 5,200 metric tons of U.S. beef in March, which was 8.5 percent less than in February. However, year end exports increased 81.7 percent above 2005, totaling 16,678 metric tons.
Although many suspect the rise in international beef exports to be attributed mainly to the resumption of some Asian trade markets, analysts say that’s certainly not the only reason.
“Some of it is due to Asian markets, but the majority of the increase is attributed to the growth of Mexico’s market,” said Lynn Heinze, U.S. Meat Export Federation spokesman.
Despite some Asian trade partners resuming trade, the largest variety meat export market was Mexico, receiving 33,538 metric tons, over half the grand total exported. All beef exported to Mexico increased 31.9 percent in March compared to February. More specifically, 29,255 metric tons of beef were exported to Mexico. As of March, Mexico was the U.S.’s largest export market with 59.9 percent of beef going to Mexico. The total was 80,561 metric tons, which was 42.3 percent greater than last year.
“The markets in the Middle East are also experiencing rapid growth, particularly in Egypt,” said Heinze.
The report showed beef exports to Egypt in the first quarter totaled 14,037 metric tons. This figure is significant, due to the drastic increase from last year’s mere 49 metric tons.
Overall, during the first quarter of 2006, U.S. beef, veal and beef variety meat exports totaled 134,430 metric tons, 37.3 percent higher than a year ago.
“We are continuing to get back to previous levels,” said Heinze. “We are getting back on track with Taiwan and Hong Kong, despite recent problems. As far as Japan, there are just a bunch of assumptions being made. As we already know, it will happen when it happens.”
Heinze said Japan, once the largest export market, will make a dramatic difference in export figures once trade is resumed.
Red meat imports
Beef imported into the U.S. is up, but remains below last year’s levels. During March, the U.S. imported 100,116 metric tons of beef and veal. This was 26.9 percent higher than February, but 7 percent lower than a year earlier. Fresh beef imports jumped 18.4 percent, totaling 32,117 metric tons. This figure was down 14.4 percent from last year. Frozen beef imports were up 35.7 percent over the previous month, but decreased 2.6 percent from March 2005, amounting to 58,410 metric tons.
Beef imports from Canada during March were 27,287 metric tons. Although this was 13.9 percent more than February, it was 21.4 percent less than last year. During the first quarter of 2006, the U.S. imported 74,698 metric tons of beef from Canada. This was 15.8 percent less than 2005. These figures translate into Canada serving as the largest source of beef imported to the U.S., consuming 27.4 percent of the grand total.
In March, beef imports from Australia rose 149.5 percent over the previous month to 29,023 metric tons. This was also 27.3 percent higher than a year ago. This year, Australian beef imports totaled 64,219 metric tons, up 72.2 percent from that a year prior.
Imports from New Zealand were up 8.8 percent from February, at 19,239 metric tons. However, from a year ago, New Zealand imports were down 17.8 percent from March 2005. During the first quarter, imports from New Zealand were 6.5 percent less than last year, totaling 55,016 metric tons.
The U.S. imported less beef from Uruguay than in February or last year. Imports equaled 11,623 metric tons in March, which was 16 percent less than a month prior and 14.5 percent less compared to last year. The imports totaled 41, 216 metric tons, dropping 11.4 percent. Overall, however, U.S. beef and veal imports during the first quarter of 2006 totaled 272,681 metric tons, which was up 1.6 percent over the same period a year ago.
Live cattle imports
The U.S. is expected to receive 2.2 million head of cattle from other countries in the current year, which is a jump of 21 percent. Last year, 1.8 million head entered the country. The 2006 increase is due, in large part, to the allowance of a full year of Canadian imports. Last year, the Canadian border was closed until July. The forecast, however, assumes no imports of Canadian cattle over 30 months of age for 2006 and 2007, consistent with government policy currently in place.
Already in the first quarter of 2006, imports from Canada totaled 342,383 head. About 62 percent were fed cattle and 38 percent were feeders. The difference between U.S. and Canadian fed cattle prices has narrowed significantly in the past several weeks, in part due to slippage of the U.S. dollar against the Canadian dollar. Canada has been contributing about 25,000 head per week to U.S. slaughter totals, counting both fed cattle imported for immediate slaughter and imported feeder cattle placed earlier in the year.
“Canada continues to reduce the surplus of cattle that accumulated following its initial case of BSE (bovine spongiform encephalopathy) in May 2003,” said FAS analyst, Mildred Haley.
The Canadian cattle inventory at the beginning of 2006 was approximately 14.8 million head. This figure was actually down from January 2005, with a record 15.1 million head imported. As the U.S. reopened the border to Canadian cattle, their slaughter patterns have shifted to include more non-fed cattle, as packer margins remain higher on these animals compared with the fed cattle for which U.S. packers also compete.
The Canadian International Trade Tribunal ruled on April 18, 2006, that duties imposed last December on U.S. corn entering Canada were not justified on antidumping grounds. These duties were $1.65 per bushel of corn imported from the U.S., although producers who exported livestock back to the U.S. could apply for rebates. The tribunal ordered duties charged in the interim to be refunded.
Cattle imports from Mexico in the first quarter of 2006 totaled 366,196 head, surpassing 2005. Drought conditions also exist in northern Mexico, although the severity does not appear to match that in adjacent areas of the U.S. Total imports from Mexico in 2006 are expected to compete with the 1.3 million head imported last year. However, that figure may come short in the near future as babesia, commonly referred to as Texas fever, worsens in Mexico, worrying some cattlemen.
Cattle imports for 2007 are forecast at two million head, which is down 9 percent from 2006 calculations.
Live cattle exports
The projections for U.S. cattle exports in 2006 are 30,000 head. So far, 8,721 cattle have been exported, of which 97 percent went to Canada. Exports in 2007 are projected to increase by 50,000 head, with most going to Canada.
International trade is on the right track, according to Heinze. According to industry leaders, cattle producers, feeders and packers have reason to be optimistic. — Mike Deering, WLJ Editor