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Border Imports Portend Tighter Feeder Cattle Supplies

importing feeder cattle
Cattle feeders and stockers have long looked to Canada and Mexico to augment tightening U.S. cattle supplies. It appears those sources are drying up, too.

Cattle feeders and stockers, searching anywhere, everywhere, for feeder and stocker cattle have long looked north and south for a little relief. It appears they’ll need to look elsewhere in the future, says Jim Robb, director of the Livestock Marketing Information Center in Denver. Cattle numbers in Canada and Mexico are dropping just like they are in the U.S., and that means fewer animals crossing the line in the years ahead.

Over the last 20 years, imports of Mexican feeder cattle have averaged 1.07 million/year. Canada, which sends feeder cattle as well as slaughter cows, steers and heifers, has averaged 1.06 million/year, Robb says.

In 2011, however, largely because of the same devastating drought that hammered the Southern Plains, imports from Mexico totaled 1.43 million, the largest since 1996 and about 200,000 higher than 2010 imports. For 2012, Robb predicts that imports from Mexico could be even larger, due to ongoing drought and high U.S. feeder cattle prices.

Looking at Canadian imports, Robb says the impact of smaller Canadian calf crops became apparent in 2011 when imports dropped to the lowest level since the U.S. banned Canadian imports in wake of its first BSE case. And the Canadian cowherd continues to shrink; since peaking in 2005, it’s declined 1.5 million head (27%), according to Statistics Canada. Nonetheless, Canadian imports to the U.S. will be slightly higher in 2012 than 2011.

So what are the prospects for 2013? “If near-normal precipitation continues in Mexico, feeder cattle imports will decline quickly,” Robb says. “Besides weather, factors that will influence imports include the strength of U.S. calf prices; the currency exchange rate; and the strength of Mexican prices, which will in part be a function of their economic growth,” he says.

Should that occur, it will affect Southern Plains feedyards the most, Robb says. “In recent years, the lowest annual import number (for Mexican feeder cattle) was 703,000 head in 2008. The possibility of 2013 being near that number is very real.”

Canadian cattle imports will also remain historically small, he predicts. “Any increase in cattle imports from Canada will be overshadowed by a decline in animals from Mexico,” he says. “Overall, with near-normal weather in 2013, total U.S. cattle imports should be the smallest since 2004, when Canadian animals were banned from the U.S. market due to their BSE status.”

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