Canadian-beef imports could resume this week
Source: Drovers Journal Email Newsletter 20 Oct 03
The USDA has announced that it will begin issuing some permits to allow Canadian beef into the United States this week. When the USDA initially announced two weeks ago that it would begin accepting applications for import permits, officials said imports would not begin until September. Preparations for the resumption of imports have moved faster than expected, and the USDA is ready to begin, on a limited basis. These initial imports will include only boneless beef products from animals less than 30 months of age and some other ruminant products determined to be of low risk with regards to BSE. The ban on imports of live cattle from Canada probably will remain in place for several more months. For more information from the USDA's APHIS, go to http://www.aphis.usda.gov/
September imports will be smaller than pre-BSE normal levels of about 20 million pounds per week (3 percent of U.S. weekly production). Analysts expect imports may approach half the pre-BSE levels in September. That lower level of imports, coupled with the already tight supply of U.S. harvest-ready cattle, suggests the border opening will have a minimal impact on prices this fall. — Greg Henderson, Drovers editor
posted by Dr. Harlan Hughes 8:11 PM
Trends . . . CATTLE ON FEED NUMBERS: U.S. AND CANADA
Source: Livestock Monitor, Livestock Market Information Center, Denver,Co. The USDA-NASS monthly Cattle on Feed report (released August 15) showed large placements of cattle into U.S. feedlots and aggressive marketings. In contrast, Canadian feedlot placements and marketings were very small due to the BSE related disruptions of their beef industry. On August 1, the U.S. on-feed inventory was 5 percent below 2002's, while the Canadian number was down 34 percent.
U.S. marketings of fed cattle for July were reported at 4 percent above 2002's. Further, U.S. feedlots that are not surveyed monthly (those under 1,000 head capacity) apparently also marketed cattle very aggressively. In Canada (Alberta and Saskatchewan), fed cattle marketings for July were reported at 25 percent below a year ago. Feedlot placements were reported at 8 percent above a year ago in the U.S., but 43 percent below a year ago in Canada.
Beef and cattle supply disruptions caused by the BSE situation in Canada have accelerated U.S. fed cattle marketings. Those marketings have combined with three other key market factors: 1) U.S. feedlots being very current prior to the blockage of Canadian beef and cattle from world markets, 2) the supply shortage caused by the blockage of Canadian product, and 3) robust demand for beef (domestic and foreign). The result has been very strong U.S. prices for beef and cattle. In mid August, fed cattle brought well over $80.00 per cwt. and prices were within a few dollars of their all time record high.
U.S. EXPORTS UP
As expected, U.S. exports of beef (on a tonnage basis) in June set a new record, surpassing the previous record set in August 2000. U.S. exports replaced Canadian product that was blocked from world markets. For June, U.S. beef and veal export tonnage (carcass weight equivalent) totaled 259 million pounds, 29 percent above 2002's.
For the month, beef sales to Canada posted the largest year-to-year increase (up 61 percent), followed by Japan (38 percent), Mexico (28 percent) and Korea (26 percent). For the second quarter of 2003, U.S. beef and veal export tonnage totaled over 678 million pounds (carcass weight), 13 and 33 percent above 2002's and 2001's, respectively.
Unlike exports, U.S. imports of beef and veal were significantly below a year ago in June due to the U.S. ban on Canadian beef. In fact, in June the U.S. exported more beef tonnage than was imported. During June, the U.S. imported just over 200 million pounds (carcass weight basis) of beef, down 36 percent from 2002's. The U.S. also imported less beef from Australia and New Zealand. For the second quarter, beef imports at 741 million pounds were 21 percent below 2002's.
posted by Dr. Harlan Hughes 6:54 PM