Daily News Update, Jan. 16, 2008

LMIC trends: U.S. beef exports increasing, slaughter cattle weights decline

Livestock Marketing Information Center: U.S. beef exports increasing, but below 2003

In late 2001, USDA-Foreign Agricultural Service (FAS) launched the Weekly Beef Export report under the directive of Mandatory Price Reporting (MPR) legislation.

The weekly beef export report provides data for U.S. exports and outstanding export sales of fresh, chilled, and frozen beef muscle cuts. All trading partners are included in the weekly report, with the export data reported on a metric ton basis.

Those data are important because they are timelier than the monthly data – the monthly data for November were released on Friday, Jan. 11, while the weekly data are complete through December. However the weekly versus monthly data are not strictly comparable.

In November 2007, U.S. beef export tonnage was just over 116 million tons (carcass weight), up about 15 million tons or 15 percent from 2006's. Weekly data indicated that further increases compared to a year ago were posted in December.

On a weekly average basis, the preliminary USDA-FAS data showed U.S. whole muscle beef exports during December were about 10 percent above a year earlier. Still, compared to pre-BSE levels U.S. beef exports remain down. For example, in December 2003, weekly average whole muscle beef cut export tonnage was reported by USDA-FAS at 12.6 million metric tons compared to only 7.8 million metric tons in December 2007.

The key markets for U.S. beef since the discovery of BSE in late 2003 have been Mexico, Canada and Japan. South Korea reemerged as a key market in 2007, however due to ongoing difficulties with shipments last year that market was again closed to U.S. beef in October.

In December, the USDA-FAS data showed weekly average U.S. exports of beef to Mexico were down 16 percent but exports to Canada and Japan were up 44 percent and 57 percent, respectively.

U.S. beef exports are forecast to continue to grow in 2008. The estimate for U.S. beef exports in 2007 is 1.42 billion pounds (carcass weight). In 2008, the forecast is for nearly 1.7 billion pounds. The record U.S. beef export level set in 2003 was just over 2.5 billion pounds.

Slaughter cattle weights decline

In the second half of December, slaughter steer and heifer weights declined much more than normal. That situation likely is the result of higher feedstuff costs and to a lesser extent some winter weather impacts on cattle in feedlots.

Slaughter steer and heifer weights began December above a year earlier, but by the end of the month were down. Overall, for the month of December, slaughter steer weights were five pounds below 2006, the first year-to-year drop since July.

For the last week of December (latest actual data available), USDA reported the average steer dressed weight at 839 pounds compared to 844 pounds a year earlier. For the same week, the average slaughter heifer dressed weight was eight pounds below 2006's.

During the first several months of 2006, slaughter cattle weights were well below 2005's due to harsh winter weather impacting cattle performance. Weather conditions and feed grain prices will determine when cattle slaughter weights return to year-to-year increases.