Canada, Mexico and the US make up the bulk of the North American cattle industry and consists of 116.1 million head, with the US representing 75.1% (87.16 million head), Mexico with 15.4% (17.8 million head) and Canada with 9.5% (11.1 million head).
Derrell Peel, Oklahoma State University Extension livestock marketing specialist, said in a letter called Cow-Calf Corner, that cattle trade between the three countries is part of the increasingly integrated cattle and beef market on the continent.
US IMPORTS FAVOR MEXICO
Total annual US imports of cattle averaged 1.93 million head in the past decade with an average of 1.16 million from Mexico (60.5%) and Canada averaging 0.764 million head (39.5%), Peel said.
In the first four months of 2024, cattle imports were 762,450 head, up 17.1% year over year, he said. Cattle imports from Mexico were up 17.3% and imports from Canada were up 16.8% over one year ago.
Cattle imports from January-April consisted mostly of feeder cattle (69.9%) with 90% of them from Mexico, Peel said. Cattle imports from Mexico are almost entirely feeder cattle (99.4%), with just a few breeding and slaughter cattle.
Feeder cattle make up just 18.9% of cattle imports from Canada, he said. In addition, cattle imports from Canada include 60% fed cattle for slaughter and 19.6% slaughter cows and bulls.
US CATTLE EXPORTS
The US does export some cattle to Mexico and Canada, Peel said. Cattle exports to Mexico and Canada averaged 13.8% of imports in the past decade but were as high as 28.8% of the level of imports in 2021.
In that year, total cattle exports were 511,000 head with 77.1% to Canada, 18.1% to Mexico and 4.8% to other destinations, he said. From January-April this year, a total of 116,084 head were exported from the US with 90.9% destined for Canada and Mexico (8.9%).
Cattle prices in the US currently are at or near record levels and moving higher, Peel said. International markets generally respond to US cattle and beef market conditions in a predictable and expected manner.
High US cattle prices will attract more cattle from available sources, so it is not surprising for cattle imports to increase somewhat in this situation, he said. However, it is important to remember that the relative sizes of the North American markets limit the extent of possible trade flow changes.
The US cattle industry is nearly five times the size of the Mexican cattle industry and nearly eight times the size of the Canadian industry, Peel said. Changes in trade will result in relatively minor market adjustments but will not change the level or trajectory of US cattle prices.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $192.15 per cwt to $199.07, compared with last week’s range of $190.00 to $198.30 per cwt. FOB dressed steers, and heifers went for $299.79 per cwt to $304.81, compared with $295.27 to $308.27.
The USDA choice cutout Tuesday was up $1.21 per cwt at $330.39 while select was up $1.91 at $306.48. The choice/select spread narrowed to $23.91 from $22.77 with 86 loads of fabricated product and 29 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $370.39 per cwt, and 50% beef was $104.59.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.55 to $1.65 a bushel over the Sep corn contract, which settled at $4.08 a bushel, up $0.01.
The CME Feeder Cattle Index for the seven days ended Friday was $255.60 per cwt, down $3.00. This compares with Monday’s Aug contract settlement of $257.37, down $1.92.