January 21, 2008

US beef import forecasts lower on increased domestic slaughter

US import forecasts for beef were lowered to 3.16 billion pounds in 2007 and 3.34 billion pounds this year due to increased cow slaughter rates, relatively low domestic beef prices and a weak US dollar.

Imports from Canada and New Zealand have shown significant declines in the last quarter compared with last year's fourth quarter, according to the US Customs.

Customs data also indicate that beef imports from Uruguay slowed in the last quarter.

However, Uruguay's imports in the second and third quarters of this year were well above last year, leaving imports in the fourth quarter to be squeezed by the Tariff Rate Quota schedule.

November Commerce data and weekly AMS reports in December showed Canadian beef imports were significantly above last year's levels. High feed costs in Canada, a tight labor market for Canadian packing plants, and a relatively strong Canadian dollar continue to give the US a comparative advantage in feeding and producing beef, affecting the imports of both feeder and slaughter cattle.

The weak US dollar has facilitated beef exports to Canada and small quantities going to nontraditional trading partners, such as Moldova and Vietnam. The exports to smaller countries have offset some of the trade lost due the banning of US beef to South Korea at the end of 2007.

Forecasts for 2007 are 1.404 billion pounds, while forecasts for 2008 remained at 1.71 billion pounds.