More exports and fewer imports supporting U.S. beef markets

Monday, April 17, 2017

More exports and fewer imports are helping to support beef markets, with February total beef exports up 19.3 percent and, combined with the January total, represent a year-to-date increase of 20.1 percent for the first two months of the 2017.

“This extends the annual 12.6 percent year-over-year increase for U.S. beef markets in 2016,” said Derrell Peel, Oklahoma State University Cooperative Extension livestock marketing specialist.

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 United States, 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 over 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 2017. Beef exports to Mexico in general have 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 fourth-largest beef export market and is up 17 percent so far this year compared to the first two months of 2016. As with Mexico, Canada’s share of U.S. beef exports also has declined over 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 decreased 23.6 percent year-over-year so far in 2017.

The top five beef export markets – Japan, South Korea, Mexico, Canada and Hong Kong – represented 83.7 percent of total U.S. beef exports in the first two months of 2017, similar to the 82.6 percent share they totaled in 2016. Beef exports in 2017 are up year-over-year to all these markets except Hong Kong.

On the flip side, U.S. 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 percent year-over-year decrease in 2016,” Peel said. “In fact, Australia is currently the fourth-largest beef import source so far in 2017.”

Peel added Australia is in roughly the same relative position as the U.S. beef industry in 2014 and 2015, with drought-reduced animal inventories restricting production and herd rebuilding further restricting beef production.

New Zealand is the largest source of U.S. beef imports so far in 2017, though even that country 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 2017. 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 source of U.S. beef imports, although year-to-date imports are down 12.7 percent compared to last year. Canada represented 23.8 percent of total beef imports in 2016.

In all, 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,” Peel said. “On average, an estimated 72 percent of U.S. beef imports are lean trimmings.”

Oklahoma is the nation’s fifth-leading producer of cattle and calves, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service.