So far in 2022, beef exports have increased over 2021’s record levels, but they are facing headwinds, said Oklahoma State University Extension Livestock Marketing Specialist Derrell Peel, in a letter to Extension agents called Cow-Calf Corner.
SEPTEMBER DATA WORRISOME
The January – September period has total beef exports up 4.6% year over year, but the latest data shows September exports were down 5.7%, the largest, and only the second monthly decrease, in 30 months, Peel said.
The only other monthly decrease in beef exports since March 2020 was a 0.9% year over year decrease in March 2022, he said. The September decrease may indicate global economic weakness is having negative effects on beef exports.
The combination of macroeconomic weakness around the world and US efforts to combat inflation with higher interest rates has resulted in the US dollar strengthening against many currencies, Peel said. A stronger dollar makes US products more expensive and simultaneously makes imports of foreign products more attractive.
The September beef export data has monthly exports to Japan down 7.5% year over year, South Korea down 10.0%, China/Hong Kong down 3.6%, Canada down 10.7% and Taiwan down 26.2%, Peel said. Of the top six beef export markets, only Mexico was up in September by 5.2%.
COUNTRY BY COUNTRY DATA MIXED
For January through September, beef exports to Japan were down 0.9%, South Korea up 1.2%, China/Hong Kong up 12.6% and Taiwan up 10%, he said. Year to date beef exports to Canada were down 0.3% and down 14.1% to Mexico.
US beef imports decreased for the fourth straight month in September, down 9.2% year over year, he said. Total beef imports were 6.4% larger for the January–September period because of strong imports early in the year.
Beef imports from Brazil spiked early in 2022 as a Chinese embargo on Brazilian beef in late 2021 made large supplies of Brazilian beef available, Peel said. In January, Brazil was the largest source of US beef imports and accounted for 28.4% of total imports for the month.
After four months of year over year decreases, Brazil accounted for 9.0% of beef imports in September and was the number six source of beef imports for the month, he said. Through September, 2022 beef imports were up from Canada, Mexico and Brazil and down from Australia and New Zealand.
Beef imports are expected to continue decreasing toward the end of the year but likely will increase in 2023 as US beef production falls from record levels, Peel said. Domestic production of lean processing beef may decline sharply in coming months, making beef imports more attractive, especially when buoyed by a strong US dollar.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $152.98 to $155.03 per cwt, compared with last week’s range of $150.11 to $153.77. FOB dressed steers, and heifers went for $235.92 to $239.81 per cwt, versus $234.01 to $242.86.
The USDA choice cutout Wednesday was up $0.38 per cwt at $258.36 while select was off $1.45 at $231.76. The choice/select spread widened to $26.60 from $24.77 with 114 loads of fabricated product and 43 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $2.05 to $2.25 a bushel over the Dec futures and for southwest Kansas were steady at $1.00 over Dec, which settled at $6.66 3/4, up 9 1/2.
The CME Feeder Cattle Index for the seven days ended Monday was $175.18 per cwt down $0.23. This compares with Tuesday’s Nov contract settlement of $175.67, down $1.25.