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U.S. Cattle Industry Will Supplement Imminent Declines In Mexican Exports

As Mexican exports decline, the U.S. is scrambling to make up for the reduced supply.

Over the last 30 years, Mexico has become an aggressive exporter of feeder cattle to the U.S. The U.S. has relied so heavily on these imports to supplement supply that experts are now calling the levels of imported Mexican feeder cattle unsustainable.

According to a new report from the Rabobank Food & Agribusiness Research and Advisory (FAR) group, the availability of cattle for shipment is expected to post a steep decline in 2013, leaving the U.S. cattle feeding industry searching for ways to make up for this sharply reduced supply.

“Record-high feeder and calf prices in the U.S., as well as a favorable exchange rate, were factors in a surge of exports to the U.S. over the last 2-3 years,” says report author Don Close, Rabobank's vice president of Food and Agribusiness Research & Advisory, Animal Protein. “However, it was really the severe drought in 2011 that prompted such a notable increase in exports to the U.S. so that the levels became unsustainably high.”

The USDA reported that all cattle and calves in the U.S. as of Jan. 1, 2013, totaled 89.3 million head, 2% below the 90.8 million on Jan. 1, 2012. This is the lowest Jan. 1 inventory of all cattle and calves since the 88.1 million on hand in 1952.

All cows and heifers that have calved, at 38.5 million, were down 2% from the 39.4 million on Jan. 1, 2012. This is the lowest Jan. 1 inventory of all cows and heifers that have calved since the 36.8 million head in 1941.

The 2012 calf crop was estimated at 34.3 million head, down 3% from 2011. This is the smallest calf crop since the 33.7 million born during 1949. Calves born during the first half of 2012 are estimated at 25 million, down 3% from 2011.

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