Agricultural News
Dynamic Market Conditions Having Major Impact on Flow of Cattle Imports from Canada and Mexico
Mon, 14 Nov 2016 11:25:23 CST
Mondays, Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel takes a look into the dymaic market conditions affecting the flow of cattle being imported into the US this year.
"Total cattle imports from Canada and Mexico are down 19.8 percent year over year for the first ten months of the year including a 13.9 percent decrease from Canada and 24.3 percent fewer cattle from Mexico compared to one year ago. Total cattle imports for the year to date include slaughter cattle which are up 10.9 percent through September. Slaughter cattle account for 31.5 percent of total cattle imports so far in 2016, up from 22.7 percent of total imports for the same period last year. Virtually all slaughter cattle imports are from Canada and include slaughter steers and heifers, up 37.7 percent year over year through September and slaughter cows and bulls, down 5.1 percent from last year. For the year to date, fed cattle account for 58.7 percent of total slaughter cattle imports compared to 49.5 percent one year. Fed cattle imports through September include a 62.1 percent year over year increase in slaughter heifers and a 22.8 percent year over year increase in slaughter steer imports. The sharp increase in slaughter heifer imports from Canada this year means that slaughter heifers account for 44.5 percent of total fed cattle imports compared to 37.8 percent of the total for the year to date last year. Increased imports of slaughter steers and heifers in 2016 follows as a result of the 31.7 percent annual decrease in feeder cattle imported from Canada in 2015.
"In 2016, feeder cattle imports from Canada are down 42.7 percent through September compared to the same period last year. The total includes a 36.6 percent decrease in feeder heifer imports and a 46.3 decrease in feeder steer imports. Unlike 2015, the decrease in feeder cattle moving to the U.S. from Canada has not been offset with increased feedlot production in Canada. Cattle on feed in the major cattle feeding regions of Alberta and Saskatchewan were down 17.7 percent in October compared to last year and feedlot placements from May through September were down 21.1 percent compared to the same period one year earlier. This follows the September announcement that the largest cattle feeding operation in Canada (located in Alberta) is not placing additional cattle and will close in early 2017. It appears that a significant number of Canadian feeder cattle may yet be in the country and will likely come to the U.S. at some point.
"Cattle imports from Mexico, virtually all feeder cattle, are down 24.3 percent for the year to date through September compared to 2015. This total includes a 43.3 percent year over year reduction in feeder heifer imports and a 21.6 percent decrease in steer imports for the year to date. Fewer cattle imports from Mexico reflect, in part, the increased demand for feeder cattle in Mexico as a result of significant expansion in feedlot and packing capacity in recent months. However, in additional to market price adjustments in all North American markets recently, the sharp drop in the value of the Mexican Peso since the election may stimulate more Mexican feeder cattle exports to the U.S. than would have otherwise occurred.
"Dynamic market conditions can have a major impact on cattle flows in the short term but the longer term structural changes suggest fewer feeder cattle will be imported from Mexico along with fewer fed cattle from Canada. This will be partially offset by more Canadian feeder cattle moving to the U.S."
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