November 18, 2003

Canada Beef Export Tonnage to US Back To Normal Levels

Canadian beef export tonnage to the U.S. is returning to normal levels only two months after the border closure was lifted to some beef products, said industry sources.

Canada exported about 60,000 metric tons of boneless beef from cattle under 30 months of age between September 10 and November 8 to the U.S., according to government data. Prior to the border closure, Canada exported about 30,000 tons of all-beef products to the U.S. each month.

Weekly shipments have been 7% to 40% above year-ago levels, said Ted Haney, president of the Canada Beef Export Federation. From October 24 to November 8 about 6,000 tons moved into Mexico, which translates to monthly levels of 12,000 to 15,000 tons, or nearly double the traditional rate, said Haney.

Haney said high prices and short supplies in the U.S. were major factors for increased demand for the Canadian products.

The U.S. recently added a number of items to the list of acceptable products, including tongues, hearts and kidneys.

"Right now we have a disruption in marketing patterns because we don't have access to those large Asian markets," said Haney. In the absence of Asian markets for certain products, those products are being sold into the U.S. and particularly Mexico. As shipments increase into the Philippines, Macau, and later China and Hong Kong, "I think we'll see exports ramp up, or spike, in those markets, and we'll see a slight moderation in the sales to the U.S. and Mexico," said Haney.

South Korea, which is a very large market for Canadian beef products, is expected to re-open its border to Canadian beef in the first half of 2004, said Haney, which will further moderate sales to other customers. Canada is "slowly moving back to more traditional marketing balances," said Haney.

Although the tonnage into the U.S. is back to normal levels, this is not the same case for its products, said Herb Lock of Farm$ense Marketing. He pointed out that there is still a large backlog of beef from animals older than 30 months, which can't go across the border.

"I don't think it's fair to call the trade normal," said Lock.