Beef Market Advisor

Tuesday, April 20, 2004

Canadian feeders ramped-up placements of cattle into feedlots dramatically in March compared to recent months. Source: Livestock Monitor, LMIC, Denver, Apr 18, 2004

Placements of cattle into Alberta and Saskatchewan feedlots at 178,744 head were down 2% from last year, but still 8% higher than 2002's. In Canada, placements of lightweight calves into feedlots were well above a year ago, with placements in the 600 lbs and less category up 125% from March 2003.

Normally, the reports like those just released for the U.S. and Canada would be considered positive for cattle futures market prices at least well into the summer quarter. But, futures markets for this summer have been anticipating good news rather soon on the international trade front, specifically significant progress being made on resuming U.S. and Canadian beef exports to Japan and Korea. If those expectations are dashed, futures market prices could drop even with on-feed numbers that indicate rather tight supplies.

posted by Dr. Harlan Hughes 7:30 PM [edit]

U .S. CANADA CATTLE/BEEF TRADE Source: Livestock Monitor, Livestock Market Information Center, Denver, Co. Apr18, 2004.

Recently, there has been much interest in how much beef the U.S. has been importing from Canada and how those numbers compare to a year ago and recent years. With the monthly data recently released for February, the picture is clear. Following year-to-year increases in the tonnage (carcass weight equivalent) of U.S. beef imports from Canada in November and December 2003, imports were below a year earlier in both January and February.

But, historically the U.S. has imported both beef and cattle from Canada. Further, the U.S. typically exports a significant amount of beef to Canada and also some cattle. So, what has been the "net" impact in terms of the year-to-year changes in beef and cattle trade between the U.S. and Canada?

On a monthly basis, no Canadian cattle have entered the U.S. since May 2003 when one BSE cow was discovered in Canada. Since December 2003, the discovery of one BSE cow in the U.S., very little U.S. beef has been shipped to Canada. When U.S. and Canadian beef shipments are converted to a live cattle basis and combined with cattle trade, the U.S. was only a net exporter to Canada for a few months during the summer of 2003 when all Canadian beef was blocked. By the fall quarter of 2003, the U.S. was back to being a net importer from Canada. For the first two months of 2004, due to the year-to-year decline in U.S. beef imports from Canada and no cattle imports, the U.S. imported about one-half of the net cattle equivalents as a year ago. That is, U.S. net imports of cattle and beef were below 2003's by an amount equivalent to about 100,000 head in January and by about 80,000 head in February.

posted by Dr. Harlan Hughes 7:26 PM [edit]

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