May 20, 2004

U.S. Beef Exports And Cattle Trade Still Limited By BSE-Related Restrictions
 
U.S. beef and cattle trade remains limited by widespread restrictions related to the 2003 discovery of BSE in Canada (May 20) and the United States (December 23).

U.S. and Canadian beef face complete bans in all major markets except the NAFTA countries of Canada, Mexico and the United States. The NAFTA countries allow beef imports from Canada and the United States provided they are boneless cuts from animals less than thirty months of age. Canada allows imports of U.S. cattle, but Mexico does not. The United States has not lifted its restriction on live cattle imports from Canada.
 
U.S. beef exports in the first quarter 2004 were only 6 percent of year-earlier levels, as even permitted exports to Canada and Mexico were far below normal levels. While exports to Canada have been allowed since January, they had only reached 6 percent of year-earlier levels in March, and weekly export data suggest similarly slow movement through April.

Exports to Mexico were resumed in March, but the weekly data suggest they have gradually increased to only 50 percent of pre-BSE levels by early May.  Exports to both countries should continue increasing for the remainder of the year and into 2005, but may not reach pre-BSE levels because of product limitations and higher-than-normal supplies in Canada. Minor markets also account for some U.S. beef exports.
 
U.S. beef exports for 2004 are forecast to be 465 million pounds¡ªonly 18 percent of last year¡¯s level. Assuming current restrictions by importers, 2005 exports of 600 million pounds are expected. Live cattle exports may be insignificant this year and in 2005, assuming restrictions by Mexico remain in place. Although live cattle may be exported to Canada, the same growing surplus of animals in Canada are expected to limit U.S. beef exports and is likely to discourage exports of U.S. animals to Canada.