Agricultural News
Record Levels of Mexican Cattle Imports Could Decline Soon
Tue, 09 Oct 2012 13:59:46 CDT
Significant numbers of Mexican cattle entered the U.S. in 2012. OSU Livestock Marketing Economist Derrell Peel has kept a close eye on the Mexican market and says the numbers may be large now, but he expects them to begin falling off rather quickly.
"Last year, feeder cattle imports from Mexico were up at about 1.4 million head which was the second-highest level ever. And these increased imports over the last two years have done quite a bit to supplement or offset, if you will, declining calf crops in the U.S. Even though feeder supplies are clearly tight at the current price levels we have, they would have been significantly tighter without these.
"So far in 2012, Mexican cattle imports are up about 33 percent. That's a year-to-date number from the latest trade data we have. And, if you project that out to the end of the year, it suggests we could get upward of 1.8 to 1.9 million head of cattle from Mexico which would be an all-time record and well above anything we've seen in the past.
"However, if you dig into that trade data a little bit you see there's a good chance this is probably not going to continue for very many more weeks. We may be at the end now or it may take a few more weeks, but almost all of the year-over-year increase of Mexican cattle imports this year is made up of two components.
"About two-thirds of that annual increase is due to heifers rather than steers. We normally import the vast majority of our imports are steers. The fact that it's heifers coming up is indicative, I think, of limited numbers of cattle in Mexico combined with the drought conditions down there that have spawned additional herd liquidation and feeder cattle liquidation to go along with that.
"The other third of the increase this year does not consist of the normal imports that are, say, feeder cattle from 400 to 700 pounds, but, in fact, is very, very lightweight calves coming in under 200 pounds. To me, again, that is indicative of the drought conditions in the sector.
"So, what it probably means is that much of the year-over-year increase that we've seen in the first part of the year is, in fact, going to tail off at the end of the year. We may still have a fairly large annual increase this year, but, I think, the numbers will pull down here in the last part of the year and certainly going into next year. I foresee a significant decrease in those Mexican cattle imports in terms of their ability to supplement smaller U.S. feeder supplies."
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