Ag News

Beef Imports Not the Culprit

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As cattle markets turned sour this fall, many pointed to imports of cattle and beef as the culprit. In fact, comments posted to some recent stories on Drovers.com suggest we have dismissed “the increase of imports from countries like Brazil as a contributing factor to price decline in the feeder calf market.” Another noted the “extraordinary increase in beef imports” that have “mirrored the drop in cattle prices.”

Do the facts bear out those claims? In a word, no.

U.S. Department of Agriculture data for both beef and live cattle imports show decline in 2016. U.S. beef imports through September were 11% lower than the previous year, and Sterling Marketing president John Nalivka projects that’s about where the year will end. Nalivka projects another 12% decline in beef imports in 2017.

Similarly, USDA reports live cattle imports through September were down 18% compared to 2015.

Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, says cattle and beef imports have been a factor in the cattle markets for a long time, so “to cause the dramatic decline in our markets that we saw this year we would have needed a catastrophic increase in imports. In fact, they’ve gone down.”

Additionally, a case can be made that imported beef can add value to U.S. beef carcasses. That’s because a lot of the imported beef is lean that gets added to the grind of hamburgers.

“We spend a lot of time and money feeding cattle in U.S. feedyards,” Peels says. “The chucks and the rounds from many of those cattle are more valuable sold as cuts than if they were ground into hamburger. So if we supplement some of our hamburger with imported beef we can sell our U.S.-raised chucks and rounds at a higher price.”

Economists and industry leaders believe that trade must be a two-way street. In that regard, the U.S. beef industry is profiting when comparing imports and exports.

“The value of U.S. beef exports far exceed the value of imports,” Peel says.

According to USDA data reported by the U.S. Meat Export Federation, export volume for the Jan.-Sept. period was 8% above last year, and the value was $4.54 billion. The value was down 5% from last year, partially due to a weaker U.S. dollar.

Beef exports accounted for 13.5% of total beef production in the Jan.-Sept. period, and the export value per head of fed slaughter averaged $256.98 in September.

As for the “growing tide” of imported beef some claim, the long-term trends don’t support such allegations. The U.S. will import about 3 billion pounds of beef in 2016, which would be nearly 3% less than the 3.085 billion pounds imported a decade ago.

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