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While cattlemen came to hear about global beef trade, the situation with Canada is what was top of mind at a Cattlemen's College session at the recent National Cattlemen's Beef Association annual industry convention and trade show.
Cattle-Fax analysts told NCBA members and other attendees that the international ban against U.S. beef, resulting from a Dec. 23, 2003, finding of BSE in Washington state, has helped restructure the international trade puzzle. Countries have redirected their supply to take advantage of markets the United States lost. Cattle-Fax Chief Executive Officer Randy Blach also pointed out that U.S. exports of chicken and pork have helped fill the gap left by U.S. beef.
At the same time, the United States saw beef imports surge to a record 3.6 billion pounds in 2004. This came as a result of a 1.7 billion-pound drop in U.S. beef production combined with strong consumer demand and near record prices.
Still, U.S. cattlemen are trying to figure out what impact the resumption of Canadian live cattle imports will have on U.S. producers if that trade resumes March 7 as USDA has proposed.
Cattle-Fax analysts pointed out that the beef is already coming from Canada. The question is how does the United States want to receive it—live, boxed or both?
Canada, as allowed, sent 1.1 billion pounds of boneless boxed beef to the United States in 2004. This was in line with past levels. If live cattle trade is prohibited, Cattle-Fax estimates that figure will be 1.6 billion pounds in 2005.
If live cattle trade is permitted, Cattle-Fax estimates that there are about 300,000 to 400,000 head of feeder cattle that could be imported in 2005. This is in line with historical averages. In the late 1990s, the United States actually exported more feeder cattle to Canada than it imported by about 14,000 head per year.
The United States usually imports between 1.3 and 1.5 million feeders per year, with about 1.2 million of those coming from Mexico.
Cattle-Fax further estimates that about 600,000 to 700,000 head of Canadian fed cattle could be imported, but projects the actual number closer to 500,000.
All the numbers must be filtered through the fact that Canada is increasing its slaughter capacity. The end result will pressure the packing industry and result in either Canada or the United States most likely feeding and processing fewer animals.
While there are ongoing talks with Japan to reopen that market, there are questions about how quickly market share in key export markets can be regained.
