May 20, 2005


US 2005-06 beef exports and imports to increase slightly



The latest forecast for US beef exports through the remainder of 2005 is slightly down from last month, with the 2005 total projected at 625 million pounds. While both US and Japanese Governments are working toward the reopening of the Japanese market, the forecast assumes current policies remain in place until changes are announced. Similarly, the forecast assumes no changes in the South Korean ban. This also applies to the new forecast for 2006.


Mexico remains the primary US beef customer in 2005. Its 2005 imports are expected to significantly exceed those of 2004 (Mexican imports didn't resume following the December 2003 BSE announcement until almost the end of the first quarter of 2004). A 5-6 percent year-to-year increase in U.S. beef exports in 2006 is also expected, again with the increase mainly going to Mexico.


Canada is a distant second as a US customer in both years. Total forecast exports of 660 million pounds for 2006 are about 26 percent of total U.S. beef exports in 2003. The forecast for 2005 beef imports has been revised slightly downward to 3.70 billion pounds.


Imports in 2005 started slowly, particularly from Australia, but they should catch up with expectations during the rest of the year. Foreign exporters may have expected cattle trade between the United States and Canada to resume in March 2005, only to see it delayed by legal action.


Demand for lean beef in the United States remains strong, as the domestic herd is at the bottom of the cattle cycle and cow slaughter is relatively low. Processed beef imports from Brazil are expected to decline slightly through the late second quarter and early third quarter of 2005 as that country attempts to correct sanitary problems at slaughterhouses.


The initial import forecast for 2006 is set at 3.74 billion pounds, reflecting continued strong domestic demand for beef and the cyclical low in the US herd. Imports from Uruguay are expected to increase in 2005 over their strong showing in 2004, though this may not be sustained in 2006.

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