June 21, 2007

US beef imports to gain momentum this year amid slow start

Beef entries to the US have been 2 percent lower than a year ago in the calendar year to mid-June, data from the US customs show.

While imports from Canada and Uruguay were similar to last year, imports have been 8 percent below from Australia and 2 percent for New Zealand. The decline in imports was due to the subdued export volumes that were shipped to the US in December 2006 and during January and February 2007. Australian exports to Japan and South Korea posted high levels over this period.

But Australian exports to the US have gathered pace since March 2007, with shipments in April and May being 20 percent and 18 percent above year ago levels respectively. While the increase is mainly due to higher cow turnoff, part of the surge is also due to strong demand for chilled Australian beef in the US. These increased shipments have started being reflected in import data over the last few weeks and is expected to continue in the coming weeks.

Imports of beef from Uruguay (in-quota and out-of-quota) are also gaining momentum to the US. At the end of March, Uruguayan import entries were around 25 to 30 percent below 2006 levels but were on par a year ago in mid-June. This rebound was expected as lower Uruguayan imports for US last year reflected the short-term supply disruptions in Brazil due to the foot-and-mouth-disease outbreak in October 2005 and Argentina's interrupted exports over government restrictions in March 2006. Uruguay's beef has been diverted to Russia, Israel and Chile and will return to the US once the disruptions have been eased.