Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211


Agricultural News

Peel Says Beef Trade Troubles Hitting in 2015

Mon, 16 Mar 2015 12:25:17 CDT

Peel Says Beef Trade Troubles Hitting in 2015 Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist, writes in the latest Cow/Calf Corner newsletter.

I dislike the term "perfect storm" because it is too frequently used and too casually applied to many situations. However, it is an appropriate description of international cattle and beef trade in early 2015. Several factors joined forces simultaneously to seriously impact beef exports and imports so far this year. The situation in 2015 is a continuation of trade issues that developed in 2014. Total beef production decreased nearly 6 percent in 2014 and resulted in dramatic increases in U.S. cattle and beef prices. A rapidly strengthening U.S. dollar in the second half of the year further exaggerated prices both with respect to U.S. exports and imports, making U.S. exports more expensive and imported beef more attractive in the U.S. market.

Beef exports were mixed to major export destinations in 2014, compared to 2013, with increased exports to South Korea (up 19 percent); Hong Kong (up 16 percent) and Mexico (up 8 percent) offsetting decreased exports to Canada (down 22 percent) and Japan (down 1 percent) and holding total exports to a less than one percent decrease. Continued growth in beef exports pushed the Hong Kong total, which surpassed South Korea in 2013, past Canada to be the number three U.S. beef export destination behind Japan and Mexico in 2014.   Total 2014 beef imports were up 31 percent, year over year, with increases from all major import sources. Import increases were led by Australia (up 74 percent); Mexico (up 23 percent); New Zealand (up 14 percent) and Canada (up 12 percent). The majority of U.S. beef imports are processing beef, largely for ground beef, the demand for which was enhanced in 2014 by a 14 percent drop in U.S. cow slaughter.

The west coast dock slowdown that developed in late 2014 culminated in severe disruptions in meat exports by January of this year. The combination of adverse economic values and hampered logistics dealt a serious blow to beef exports in January. Total exports in January were down 19 percent year over year with decreased export quantities to all major beef export destinations including Hong Kong (down 33 percent); South Korea (down 28 percent); Canada (down 24 percent); Japan (down 15 percent) and Mexico (down 11 percent). The dock dispute has been settled but it will likely take several more weeks for port movement to return to normal. In the meantime, some beef that would have been exported was diverted back into domestic markets on top of the winter weather impacts that slowed beef movement and demand in the U.S.

Interestingly, the dock situation seemed to have less impact on beef imports which jumped dramatically in January. January beef imports were up 64 percent over January, 2013, led by Australia (up 124 percent); New Zealand (up 38 percent); Mexico (up 35 percent) and Canada (up 18 percent). Beef imports from Uruguay and Nicaragua were also up sharply year over year. Increased beef imports reflect continued strong demand for lean beef, primarily for ground beef.

U.S. cattle imports were up 16 percent in 2014 from one year earlier as U.S. cattle market prices and the strengthening dollar attracted more cattle form Canada and Mexico. Total feeder cattle imports were up 20 percent year over year, consisting of a13 percent increase in Mexican cattle imports and a 38 percent increase in Canadian feeder cattle. Canadian slaughter cattle imports were up 7 percent in 2014 compared to year earlier levels. Recently released Canadian cattle inventories indicate that cattle numbers continue to fall in Canada and that herd rebuilding has not yet begun. Anticipated increases in heifer retention in both Canada and Mexico may limit cattle exports from both countries to the U.S. in 2015 January cattle imports were down a combined 14 percent year over year with Canadian numbers down 26 percent and imports of Mexican cattle down 3 percent. Total cattle imports consisted of a combined three percent decrease in feeder cattle imports and a 33 percent decrease in imports of Canadian slaughter cattle. Despite tight cattle numbers and potential heifer retention, strong U.S. cattle prices and weaker Canadian and Mexican currencies will keep the incentives to export cattle to the U.S. strong.

Improvement in the port situation should improve the flow of beef in the coming weeks. Moving forward in 2015, it's not clear whether the dollar will continue strengthening relative to other currencies but U.S. beef and cattle prices will remain high in any event. The surge in beef imports from Australia has been fueled by drought-forced liquidation and unsustainable levels of Australian beef production. Continued drought may result in additional Australian cattle liquidation but possibly at a slower pace as cattle inventories decrease. Drought improvement could lead to sudden decreases in beef exports from the country if rebuilding should begin. Though some of the factors adversely affecting beef trade may improve, it is likely that U.S. beef exports will continue weak and drop more in 2015 while beef imports will likely remain elevated.



WebReadyTM Powered by WireReady® NSI


Top Agricultural News

  • Attorney General Drummond Pushing Back on Biden Administration Over Lesser Prairie Chicken  Sun, 05 Feb 2023 14:40:29 CST
  • Attorney General Gentner Drummond Pushing Back on Biden Administration Over Lesser Prairie Chicken  Sun, 05 Feb 2023 14:39:57 CST
  • Feeder Steers Mostly Steady, Steer and Heifer Calves Mostly Steady at Woodward Livestock Auction  Fri, 03 Feb 2023 04:39:26 CST
  • Feeder Steer and Heifers Mostly Steady, Steer and Heifer Calves with a Higher Undertone at OKC West - El Reno  Thu, 02 Feb 2023 05:35:14 CST
  • Yellowstone Co-Creator Taylor Sheridan Wanted to Tell the Story of the West and Where Food Comes From  Thu, 02 Feb 2023 05:07:48 CST
  • Yellowstone Creator Taylor Sheridan Wanted to Tell the Story of the West and Where Food Comes From  Thu, 02 Feb 2023 05:04:52 CST
  • Drought the Culprit as Oklahoma Cattle Numbers Drop 600,000 Over the Last Twelve Months- Worse in the U.S.  Wed, 01 Feb 2023 05:20:49 CST
  • Feeder Steers and Heifers Not Well Tested, Steer Calves Steady to Higher at Oklahoma National Stockyards  Tue, 31 Jan 2023 05:15:53 CST

  • More Headlines...


    Ron salutes our daily email sponsors!

    Oklahoma Beef council Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit Ag Mediation Program P&K Equipment Oklahoma City Farm Show Union Mutual Stillwater Milling Oklahoma Cattlemen's Association KIS FUTURES, INC.

    Search OklahomaFarmReport.com

    © 2008-2023 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.