US Beef Markets Find Steady Support from Strong Export Demand and Low Pressure from ImportsMon, 10 Apr 2017 10:20:51 CDT
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 discusses the recent strength of beef exports and the positive effects it is having on the US beef industry.
"U.S. beef exports continue the 2016 trend with additional improvement so far in 2017. February total beef exports were up 19.3 percent and combine with the January total for a year to date increase of 20.1 percent year over year for the first two months of the year. This extends the annual 12.6 percent year over year increase in 2016.
"Japan remains the top destination for U.S. beef exports, up 44.4 percent year over year for January and February. Beef exports to Japan represented 29.9 percent of beef exports so far this year. Japan accounted for 25.7 percent of total beef exports in 2016. South Korea is the second largest beef export market for the U.S., up 26.5 percent in the first two months of the year compared to the same period in 2016. South Korea has had a rising share of U.S. beef exports in the last four years and represented 17.8 of total beef exports in 2016.
"Mexico is third largest beef export market, up 25.8 percent year over year for the year to date. Beef exports to Mexico have generally decreased in recent years but did show a year over year increase of 8.6 percent in 2016. Mexico’s share of U.S. beef exports has dropped sharply in the last few years to a 2016 level of 15.4 percent of total beef exports. Canada is the number four beef export market and is up 17.0 percent so far this year compared to the first two months of 2016. Canada’s share of beef exports has also declined some in the last five years with a 2016 share of 12.1 percent of total exports. Hong Kong has had a larger share of U.S. beef exports in the last four years but dropped from the previous year to 11.5 percent of total exports in 2016. Beef exports to Hong Kong so far in 2017 are down 23.6 percent year over year.
"The top five beef export markets (Japan, South Korea, Mexico, Canada and Hong Kong) represented 83.7 percent of total beef exports in the first two months of 2017, similar to the 82.6 percent share in 2016. 2017 beef exports are up year over year to all of these markets except Hong Kong.
"Beef imports are down 17.4 percent year over year in the first two months of 2017. This follows a 10.5 percent year over year decrease in 2016. Australia, historically the largest source of U.S. beef imports, is down 45.5 percent so far this year following a 39.0 percent year over year decrease in 2016. In fact, Australia is currently the fourth largest beef import source so far in 2017. Australia is in roughly the same relative position as the U.S. beef industry was in 2014/2015, with drought-reduced animal inventories restricting production and herd rebuilding further restricting beef production at the current time.
"New Zealand is the largest beef import source so far in 2017 but is down 21.1 percent year over year, following a 7.3 percent year over year decrease in 2016. Mexico is the second largest beef import source thus far in 2017 and is up 37.2 percent year over year in the first two months of the year. Imports of Mexican beef have grown sharply in recent years, jumping 25.9 percent in 2016 and accounting for 16.4 percent of total beef imports. Canada is the third largest beef imports source, with year to date imports down 12.7 percent. After an annual year over year increase of 14.3 percent, Canada represented 23.8 percent of total beef imports in 2016. The top four import markets represented 85.9 percent of 2016 beef imports. Significantly smaller import shares include Brazil, which accounted for 5.1 percent of total imports along with 4.1 percent from Uruguay in 2016. Beef imports are largely driven by the demand for lean trimmings used in the ground beef market. On average, an estimated 72 percent of U.S. beef imports are lean trimmings."
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