Update on U.S. Beef Trade Prospects and Cattle On Feed Numbers
 

U.S. BEEF TRADE IN '97 AND PROSPECTS FOR '98

 On Thursday (February 19, 1998) the USDA released the monthly meat trade data for December. U.S. imports and exports of beef during December followed the general trends of the previous six months. For the year (1997), beef imports and exports were above 1996's.
    In December, the U.S. imported about 8.5 percent (14 million pounds) more beef on a carcass weight basis than a year earlier. Major countries that sent more beef to the U.S. during December included Canada, New Zealand, Argentina and Brazil. Only Australia posted a year-to-year decline in tonnage of beef shipped to the U.S.
    U.S. beef and veal exports for December 1997 were well above a year  earlier to Japan (up 35 percent) and Mexico (up 66 percent). U.S. beef  exports continued to erode to Korea in December posting the smallest monthly shipments since June 1996. Overall, December's export tonnage
increased 22 percent compared to a year earlier. U.S. beef and veal exports during December were 173 million pounds (carcass weight); the largest for the month since the USDA began reporting monthly carcass weight export figures (1988).
    The U.S. continued to import more tonnage of beef and veal in 1997 than it exported. For calendar year 1997, U.S. beef and veal imports totaled 2.3 billion pounds (carcass weight). That was the largest level of imports since 1994. U.S. exports grew at an annual rate of 14 percent in 1997
reaching 2.1 billion pounds (carcass weight). So, the tonnage of U.S. beef exported continued to set new records in 1997. U.S. beef exports increased dramatically to Mexico in 1997, posting a 45 percent year-to-year increase.
    For calendar year 1997, the tonnage of U.S. beef and veal imported was equivalent to about 9 percent of U.S. production. In 1990 and 1996 imported beef and veal represented about 10 and 8 percent of U.S. production, respectively. U.S. beef and veal exports represented just over 8 percent of production in 1997, compared to about 4 percent in 1990 and just over 7 percent in 1996.
    Prospects for U.S. beef exports and imports may change in 1998. U.S. imports of beef are forecast to increase in 1998. Poor economic conditions in Asia are projected to dampen beef exports to that region, especially to Korea. In 1998, U.S. beef exports to Mexico are projected to continue to grow. But growth in exports to Mexico may not be able to compensate for the decline in Asian purchases.

CATTLE ON FEED

    USDA's February 1 Cattle on Feed report (released February 13) continued to follow the trends of recent months--the number of cattle on-feed was above a year earlier, marketings were lackluster, and placements were down from a year earlier.
    As of February 1, the on-feed inventory was up 4 percent compared to a year earlier for feedlots with 1,000 head plus capacity. In terms of head,
there were nearly 600,000 head more cattle in U.S. feedlots than a year ago.
    In response to large losses on cattle closedout in recent months, feedlots continued to reduce placements. Cattle fed in commercial feedlots and closedout in January posted losses of about $100 per head. U.S. and 7-state placements of cattle into feedlots during January were down 9 percent and 10 percent, respectively. As in recent months, most of the year-to-year decline in placements occurred in the lighter weight categories (under 600 pounds and 600-699 pounds).
    Feedlots did notmarket cattle aggressively in January, given the large front-end supply (number of heavy weight cattle in feedlots). The number of cattle that have been on-feed for over 120 days continued to increase in January.
    Fewer head than a year ago also are expected to be placed into feedlots during February. That will continue to pull the on-feed inventory closer to a year earlier. Still, as of March 1 there will be significantly more cattle on-feed than last year.

John McKissick and the Livestock Market Information Center. Feb. 23, 1998

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