Growth is anticipated overall this year in the US market for cattle imports from Canada as cattle imports for immediate slaughter were 12% above year-earlier levels in January and February.

On average, over 60% of the cattle imported by the US from Canada are for immediate slaughter. Feeder and slaughter cattle prices are on the rise in both the US and Canada. In the US, slaughter prices reached an 18-month high in March and increased further in April. In addition, feeder cattle prices are at highs not seen since early July 2008.

Notably, the price differential between US and Canadian slaughter cattle has widened substantially in recent weeks, increasing finishing feedlot margins for Canadian cattle exporters. The price differences between US and Canadian feeder cattle weight categories are also showing substantial increases.

Continued strength in the Canadian dollar will provide little incentive for Canadian feeders to increase marketings of cattle in the US; however, a wide enough price differential between US and Canadian slaughter cattle can offset the exchange rate factor and perhaps be the clearest market signal for Canadian cattle feeders to export greater numbers of cattle.

The US is expected to import 2.15 million head of cattle this year, amounting to 7% growth from 2009.