International trade in the beef sector involves many products. It’s not just beef. In this article, several categories were compiled for 2019—they were: live cattle; beef and veal; hides and skins; variety meats; and tallow and greases. We can aggregate diverse categories together (head of cattle, pounds of meat) if we use the dollar value data provided by USDA’s Foreign Agriculture Service.
Regarding exports in 2019, all those categories described above, when added up, totaled $9.33 billion. That was below 2018’s total—still, it was the second-largest ever. The biggest category of U.S. exports was beef and veal, at $7.12 billion, or about 79 percent of the overall value. Non-meat items represented the balance.
For the year, the beef and veal export value category slipped by nearly 5 percent from 2018’s all-time high. The second biggest category was variety meats (e.g., internal organs), surpassing hides and skins for the first time. Variety meat export value set a new high, rising 8.7 percent year over year. Tariff wars and large slaughter levels (e.g., Australia because of drought) hit the hide and skin segment especially hard. Tallow and grease export value slipped slightly, while in dollar terms, live cattle exports edged higher.
Turning to the imports, as is usual, the largest category was beef and veal (72 percent). That value in 2019 was $6.01 billion. The second was live cattle, which includes a wide range of animals—fed cattle, calves, yearlings, and cull animals (slaughter cows and bulls). U.S. imports are small in the other two categories. In total, the U.S. imported $8.33 billion, a year-over-year increase of 9.2 percent.
Without export markets, most U.S. produced byproducts have little value, and several would have a disposal cost.
Netting out exports versus imports in dollar terms, 2019 was the fourth year in a row where the U.S. exports exceeded imports. Also, making a significant net positive contribution to the U.S. beef sector was the variety meat category. The net for live cattle was negative, as usual (imports were larger than exports). In total, the value of beef sector exports exceeded imports in 2019 by nearly $1 billion (the actual number was $984 million). Compared to a year earlier, 2019 was not as good. Year over year, the net value of sector exports, declined by $1.23 billion.
The net value has the potential to bounce back in 2020 with reduced tariffs on U.S. sales by key countries, including Japan. A near-term boost could come if China quickly gets the novel coronavirus behind them.
Categories used here mask a lot of details involved like the actual byproducts (liver, tongue, etc.), meat cuts (short ribs, manufacturing beef, etc.), and types of animals (calves, fed cattle, cull cows) being exported and imported. It’s important to note that changes in exchange rates do influence annual comparisons of values of goods traded internationally.
As an economic basis to determine whether international trade is positive or negative for part of the U.S. beef industry, or even in aggregate, net trade value should be used with caution. It’s more complicated than that. An item exported receives a higher price in a foreign country than in the U.S.; otherwise, it would not be exported. Also, the economic cost of a lost beef market is tied to forcing more tonnage into our marketplace, which would drop the price. Without export markets, most U.S. produced byproducts have little value, and several would have a disposal cost. — James Robb, Livestock Marketing Information Center senior economist
