Now that the USDA’s Animal and Plant Health Inspection Service has suspended temporarily imports of Mexican cattle into the US, there are many questions about the implications the closure might have on US cattle markets.
Derrell Peel, Oklahoma State University Extension livestock marketing specialist, wrote a study of those implications in a letter called Cow-Calf Corner. This is a summary of the study.
MEXICAN CATTLE IMPORTS SIGNIFICANT
An average of 1.17 million head of cattle were imported from Mexico from 2004-2023, ranging from about 703,000 in 2008 to a maximum of 1.47 million in 2012. Mexican cattle imports represent 3.3% of the total US calf crop on average.
Mexican cattle imports have averaged 84.5% steers and 15.5% spayed heifers over the past 20 years. However, in the five years from 2019-2023, the percentage of heifers increased to an average of 21.3%.
Mexican cattle imports have maintained a relatively stable seasonal pattern for many years with peak months in the spring and in November/December with lows in summer. In recent years the seasonal pattern has equalized slightly with fractionally lower peak months and higher summer lows, but the pattern remains.
NO REAL TIMELINE
The USDA indicated the border was expected to be closed at least three weeks from the Nov. 22 announcement. Protocols are being developed for a partial border reopening (New Mexico and Arizona ports) that will include a pre-export inspection of all cattle, treatment for insects and a seven-day quarantine, followed by the usual border inspection and crossing process.
It seemed likely to Peel that few, if any, additional Mexican cattle will be imported in 2024. The preliminary 2024 import value was based on weekly data through Nov. 23 with a total of 1.24 million head, which may be very close to the annual total.
Through September, Mexican cattle imports were up 21.3% year over year, suggesting total annual imports could be about 1.5 million head. Most of the increase was from additional spayed heifer imports, up 87.2% year over year and accounting for 35% of total cattle imports.
November and December typically account for roughly 22% of annual imports. Assuming no imports for the last week of November and all of December and given the pace of imports thus far this year, it is likely that annual imports will be reduced by 200,000 – 250,000 head from the probable total before the screwworm announcement.
If the import ban does not drag on, currently blocked cattle will enter the US eventually, reducing the ban’s effect. In the meantime, there will be tighter feeder supplies.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $190.62 per cwt to $190.85, compared with last week’s range of $186.86 to $189.51 per cwt. FOB dressed steers, and heifers went for $294.15 per cwt to $296.46, compared with $290.89 to $298.91.
The USDA choice cutout Monday was up $2.49 per cwt at $313.01 while select was up $2.70 at $277.00. The choice/select spread narrowed to $36.01 from $36.22 with 73 loads of fabricated product and seven loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $323.17 per cwt, and 50% beef was $69.52.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.35 to $1.54 a bushel over the Dec corn contract and in Kansas at $0.15 over Mar. Dec settled at $4.24 ½, up 1 ½, and Mar settled at $4.32 ½, down $0.00 1/2.
The CME Feeder Cattle Index for the seven days ended Friday was $257.13 per cwt, up $2.81. This compares with Monday’s Jan contract settlement of $256.85, down $2.62.