June 18, 2009

US beef exports are expected to decline about eight percent this year to 1.744 billion pounds, but shipments will increase next year, according to the USDA's Livestock, Dairy, Poultry Outlook report.

Weak foreign demand and a stronger US dollar are weighing on exports, with shipments to Mexico and Canada down 19 percent and 15 percent respectively from a year ago. US beef exports to South Korea have also tracked lower since the start of 2009 as weak economy limited imports from all sources.

Japan, however, is supporting the export as an appreciating yen against the dollar has kept US beef affordable.

In 2010, US beef shipments are expected to increase over nine percent to 1.905 billion pounds, as the global economy recovers from the current recession, USDA said.

Meanwhile, US beef imports are expected to grow 12 percent this year to 2.839 billion pounds, largely driven by a 55-percent increase of imports from Australia year-to-date to April.

The USDA said domestic beef demand was disappointing during the Memorial Day, and prices have since declined due to seasonal trends and lacklustre demand. Beef continues to face tough competition from the cheaper pork and poultry.

Commercial beef cow slaughter will likely continue below year-ago levels as cow calf producers are reluctant to increase cow inventories by retaining replacement heifers, the USDA said.

The second quarter of 2009 will see total commercial cow slaughter fall slightly behind from the same period in 2008. Commercial dairy cow slaughter during the period will increase due to liquidation in response to poor returns, and could offset much of the reduction in commercial beef cow slaughter because of the Cooperatives Working Together programme.

Combined commercial beef and dairy cow slaughter for the second half of 2009 is expected to increase from the same period in 2008 due to continued heavy dairy cow slaughter and a seasonal increase in beef cow slaughter.