Industry At A Glance: Beef exports add a big bump to fed cattle value

Industry At A Glance: Beef exports add a big bump to fed cattle value

The investment in global trade pays excellent dividends for beef producers. 

By all measures, 2014 was unprecedented from a cattle market standpoint. There were several drivers behind the fed market’s streak to $170 trade in late November. Beef exports were among the most critical components serving to bolster fed trade to new highs.

Export market value in 2014 established a new annual record: $6.98 billion. That’s the equivalent of $341/head for every fed steer and heifer marketed in the U.S. – or roughly $27/cwt. in added value to the market. Alternatively, growth in international trade has added $25/cwt. to the fed market since 2004 when beef export value bottomed following BSE. That accomplishment is the direct result of years of patience and hard work. The investment in global trade pays excellent dividends for beef producers.

Beef trade is NOT as responsive to changes in foreign exchange, compared to grain, dairy and other agricultural products. However, a stronger dollar does threaten U.S. beef’s relative value in the global marketplace. Typically, a sustained rise in the value of the dollar will result in exports waning going forward (a stronger dollar reduces the relative value of foreign currency thereby making U.S.-sourced products more expensive). Meanwhile, if country-of-origin labeling (COOL) is not resolved in a satisfactory manner, trade with our NAFTA partners (the largest buyers of U.S. beef) could become problematic.

beef exports value

What’s your perception of foreign trade for the beef industry – and its value to beef producers? How do you perceive foreign exchange shaping up in the year to come? Will the dollar get even stronger and potentially hamper U.S. beef exports? Do you think the COOL issue will be resolved to help ensure that normal trade relations remain intact with Canada and Mexico?

Leave your thoughts in the comment section below.

 

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