Despite a larger US cow herd and inventory of feeder cattle, feeder cattle prices have generally been above last year since May, with the cash feeder index this week at $158 versus $120 a year ago. Higher prices have not only benefitted the US cow/calf producers, but have also helped out other North American producers. Cumulative feeder cattle imports from Mexico through early October are up 28% from a year ago and total just under 885,000 head.
While imports of Mexican cattle have increased over last year, imports of Canadian cattle continue to decline. The latest trade data shows YTD imports from Canada are just short of 108,000 head, and are down 35% at a 6 year low. Volatility in currencies against the dollar, (especially following the 2016 election), have likely impacted the live animal trade. Currently the Mexican Peso is near unchanged from a year ago, while the Canadian dollar is stronger against the US dollar.
While the US has increased it’s imports of feeder cattle, the latest International Trade report shows that the US has also been a net beef importer from both Mexico and Canada. Net Canadian trade steadily improved from 2005 through 2013, but the trend turned down in 2014 and has since weakened. Year to date, US beef imports from Canada are the largest since 2010, and have been 346 million pounds more than US exports to Canada. The largest change in North American beef trade over the last decade has been the steady increase of Mexican imports. Through September, the US had imported more than 440 Mil Lbs of beef from Mexico, up 29% from a year ago and a more than ten fold increase from 2008. Exports to Mexico are at a 3 year high, but less than half of what they were at the same time in 2008. Combined net trade for the year shows net imports that are the largest since 2005.
US imports of Canadian feeder pig and market hogs for slaughter have not changed significantly over the last several years, but each have been significantly lower than a decade ago. Year to date feeder pig imports are the best level in 5 years at 3.8 million head, but are also barely changed from a year ago. Imports of barrows and gilts for slaughter are at a 3 year low, but total fewer than 367,000 head – or less than the equivalent of 1 day’s slaughter. Imports of feeder pig and market hog inventories were of greater significance 10-20 years ago – so much so that the USDA still publishes a US/Canadian inventory report. However imports fell sharply after the US passed country of origin labeling laws in 2008, but have not increased following the repeal in late 2015.