September 18, 2013

The US' net beef exports have grown appreciably to 72.3 million pounds in July 2013.

Net beef imports have been lower than last year on a monthly basis from May through July 2013. From January through July 2013, the US exported 42 million more pounds of beef than it imported. During the same seven months in 2012, the US imported 30 million more pounds of beef than it exported. Net beef exports can grow through increased exports, lower imports, or a combination of both. In the last few months, it has been both higher exports and lower imports contributing to the increase in net beef exports.

In July, US beef and veal exports totalled 264.6 million pounds, 14.7% more than in July 2012 and 32% than the previous five-year average for July. Exports to Japan, which totalled 80.5 million pounds in July, have led the increase in US beef exports since the BSE-related export restriction was changed from 20 months to 30 months. In fact, since October 2003 July's exports to Japan were the highest, two months prior to the original ban Japan placed on US beef imports following the BSE case in December 2003. Since February 2013, beef exports to Japan have surged, resulting in a 52% increase in January to July of 2013.

Exports to Canada and Mexico both increased in July 2013 relative to a year ago. Canada imported 15% more beef from the US while Mexico imported 32% more US beef. For both countries, increased imports of US beef have likely resulted from smaller domestic beef supplies following liquidation of their cattle herds in the last couple of years. Exports to South Korea (historically one of the top four buyers of US beef) have not fared as well in 2013.

In July 2013, the US exported 27% less beef to South Korea than in July 2012 and exports to the country have averaged 26% lower in January-July of 2013. Exports to other Asian countries have improved in 2013. In particular, beef exports to Taiwan and Hong Kong have increased by 166% and 70%, respectively, for the January-July period. Many of these exports are believed to reach China, a potentially large-growth market for beef.

The US has imported less beef in 2013, although July 2013 US beef imports were on pace with July 2012, imports from January to July were down 2%. Of interest in the July trade data are changes in the countries supplying beef to the US beef imports from Canada and Mexico were down 4% and 1%, respectively, again reflecting smaller beef supplies in those countries after liquidation of their cattle herds.

Imports were also 16% lower from New Zealand, which had emerged as a large supplier of beef to the US earlier in 2013 following drought in that country that caused increase slaughter of its cattle herd. In July 2013, the US imported beef from Argentina, Brazil, Uruguay which increased 81%, 16%, and 18%, respectively, compared to July 2012.

In last Thursday's (Sep 12) World Agriculture Supply and Demand Estimates (WASDE) report, USDA forecasted 2013 annual US beef imports and exports to be 2.298 million and 2.408 million pounds, respectively. If realised, that would make the US a net exporter of beef for the fourth consecutive year. USDA forecasts beef imports in 2014 will be 2.64 million pounds and beef exports next year to be 2.30 million pounds, which would result in the US being a net importer of beef on a volume basis, which is not uncommon by historical standards.

The lower export forecasts are predicated on declining cattle numbers and beef supplies in the US. However, growing demand from other countries, particularly China, may divert beef exported from other countries away from the US in coming years, which would effectively lower US beef imports.