June 18, 2004

BSE-related Restrictions Continue To Limit Beef Exports And Cattle Trade

Beef exports for 2004 are expected to reach only 451 million pounds, as only limited exports flow to Canada and Mexico - the only two major markets open to the United States. Both countries limit U.S. exports to boneless cuts from animals below 30 months of age. Exports to Canada and Mexico for the first 4 months of 2004 were only 5 percent and 14 percent, respectively, of year-earlier levels. Exports to both should increase but are likely to remain below pre-BSE levels.

Imports of significant numbers of feeder cattle from Mexico are the only sign of normal cattle trade. Imports of live animals from Canada to the United States remain banned. While Canada allows imports of live cattle from the United States, large supplies of Canadian cattle have made that option unattractive.

Mexico does not allow imports of live animals from the United States. But the United States imported 6 percent more feeder cattle from Mexico in the first quarter of 2004 than during the same period last year. These larger imports occurred in spite of higher-than-normal precipitation that fostered good forage conditions throughout Mexico during the winter. Periods of good forage conditions in Mexico tend to limit feeder cattle exports as animals are fed to heavier weights on pasture for export later, but stronger U.S. feeder cattle prices attracted feeder cattle imports.

The forecasts for both 2004 and 2005 are for imports of 1.3 million head of feeder cattle, all from Mexico. That would be 100,000 more than the United States imported from Mexico in 2003, a number that could go higher if dry conditions appear in Mexico later in 2004 and feeder cattle prices remain in the $95-$100 range.

Source: ERS/USDA