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As that supply of feeders from south of the border dwindles, it puts the crunch on cattle feeders from both an availability and price perspective.
August 28, 2013
The flow of cattle from Mexico is a key component of the overall supply for the U.S. cattle marketing system. Ongoing feeder cattle supply decline within the U.S. has been partially offset by increasing imports from Mexico. The need to maintain feedyard occupancy levels has generated significant demand from the south. Simultaneously, drought in Mexico has facilitated supply to meet that demand. As a result, the annual imported feeder cattle supply from Mexico peaked in January 2013.
However, there’s been a steady slowdown in the flow of imports since that time, which is largely the result of fewer cattle being available. As of mid-August, the annual import level is just slightly over 655,000 head – nearly 95,000 head behind last year’s pace and the lowest level since November 2011.
The trend is an important development in regard to the overall supply of feeder cattle and general direction of the feeder market. As that supply dwindles, it puts the crunch on cattle feeders from both an availability and price perspective.
Where do you see this trend headed? What implications does it possess for the overall feeder cattle market over the long-run? What impact might it have in terms of long-term strategy among feedyards – especially those in the south?
Leave your thoughts below.
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Nevil Speer serves as an industry consultant and is based in Bowling Green, KY.
Nevil Speer has extensive experience and involvement with the livestock and food industry including various service and consultation projects spanning such issues as market competition, business and economic implications of agroterrorism, animal identification, assessment of price risk and market volatility on the producer segment, and usage of antibiotics in animal agriculture.
Dr. Speer writes about many aspects regarding agriculture and the food industry with regular contribution to BEEF and Feedstuffs. He’s also written several influential industry white papers dealing with issues such as changing business dynamics in the beef complex, producer decision-making, and country-of-origin labeling.
He serves as a member of the Board of Directors for the National Institute for Animal Agriculture.
Dr. Speer holds both a PhD in Animal Science and a Master’s degree in Business Administration.
Contact him at [email protected].
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