After becoming one of the major US beef export destinations about 25 years ago, the last dozen years have shown greater market evolution, said Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in a letter called Cow-Calf Corner.
Mexico now is one of the US’ major beef trading partners as the market evolved from simply supplementing deficit production there to bilateral, product specific trade between the two countries, Peel said.
LIVE CATTLE TRADE
One of the oldest components of US beef industry trade with Mexico has been the importation of live cattle, Peel said. Mexico’s extensive range resources have provided the country with a comparative advantage in feeder cattle production.
Annual imports of Mexican cattle have averaged more than 1 million head for the last 40 years, he said. Feeder steers made up 80.7% of cattle imports with spayed heifers adding another 19.0% of the total.
Many of the Mexican cattle imports enter stocker programs in the US prior to feedlot finishing, although some are placed in feedlots directly upon arrival, Peel said.
In 2023, imports of cattle from Mexico increased 43% year over year, he said. However, the large percentage increase was in comparison to a very low 2022. Imports of Mexican cattle in 2022 were the lowest since 2008.
Annual flows of Mexican cattle into the US vary from year to year because of many factors in both countries including relative cattle numbers and cattle prices; beef market conditions; drought, and currency exchange rates, he said.
SOME PERSPECTIVE
It is common to talk about trade flows in absolute values, but this does not provide any perspective relative to the US market, Peel said. Imports of Mexican cattle have averaged 3.2% of the US calf crop for the past 25 years, ranging from 1.9% to 4.3%.
Finally, it should be noted that the US does export some live cattle to Mexico, mostly breeding animals, he said. For the past 25 years, an average of 43,000 head have been exported annually, making cattle exports about 4.3% of imports from Mexico. In 2022, more than 103,000 head were exported to Mexico, the highest since 2002.
CANADIAN IMPORTS
Weekly feeder cattle imports from Canada are lagging the 2018-2022 average but remain more than last year, USDA data compiled by the Livestock Marketing Information Center showed. The first week of March showed imports of 2,660 head, up 264, or 11.0%, from 2,396 in the same week last year but down 2,227.6, or 45.6%, from the previous five-year average of 4,887.6 head.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $188.79 per cwt to $193.89, compared with last week’s range of $185.74 to $192.95 per cwt. FOB dressed steers, and heifers went for $294.41 per cwt to $299.60, compared with $290.20 to $299.32.
The USDA choice cutout Tuesday was up $0.20 per cwt at $311.09 while select was down $1.70 at $300.26. The choice/select spread widened to $10.83 from $8.93 with 87 loads of fabricated product and 35 loads of trimmings and grinds sold into the spot market.
The daily weighted average USDA listed wholesale price for fresh 90% lean beef was $336.65 per cwt, and 50% beef was $103.47.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.40 to $1.55 a bushel over the May corn contract, which settled at $4.32 1/2 a bushel, down $0.05 1/4.
The CME Feeder Cattle Index for the seven days ended Monday was $251.63 per cwt, down $0.07. This compares with Tuesday’s Mar contract settlement of $247.72, down $1.72, and Apr’s $245.45, down $5.00.