U.S. Beef-Cattle Trade Deficit With Canada Increases

(Billings, MT)  Trade data reported by USDA shows that if present trends continue, Canadian imports of beef and live cattle could reach an all-time high in 2001.  According to USDA-Agricultural Marketing Service (AMS) reports, Canadian live cattle imports through August 31 of this year were 33 percent higher than the same period last year.

Beginning in September of this year and continuing through most of November, the U.S. cattle industry was marked by declining beef demand, sluggish movement of cattle to market, and reports that some packing plants were shortening their processing week.  Despite these unfavorable economic indicators, Canadian cattle imports were 46 percent higher during this period than was imported during the same period last year.

In the primary market of Colorado, Canadian fed cattle imports reached 10.6 percent of all cattle slaughtered in the state in July.  This represents a 400 percent increase over Colorado’s July slaughter of last year.  “Many U.S. producers believe these unprecedented import surges have caused the recent back-up of U.S. cattle supplies, leading to increased domestic carcass weights,” said R-CALF USA President Leo McDonnell.

In addition to the marked increase in Canadian live cattle imports, imports of Canadian beef were 6 percent higher through November of 2001 than during the same period last year.  “If this trend continues, Canadian live cattle imports will reach nearly 1.3 million head and Canadian beef imports will set a new record at around 970 million pounds, for a combined 1.97 billion pounds of Canadian beef and live cattle imports (converted to carcass weight equivalent),” predicted McDonnell.

While Canadian beef and live cattle imports are on the rise, U.S. exports of beef and live cattle to Canada are falling.  From January through August of this year, the U.S. exported 149 million pounds of beef to Canada – down 12 percent from the same period last year.  Also through August of this year, the U.S. exported 139,576 head of live cattle to Canada – down 6.5 percent from the same period last year.  “Exports of live cattle to Canada are expected to reach 350,000 head by year’s end primarily due to the efforts of the Northwest Pilot Project,” McDonnell commented.

“By the end of this year, the trade deficit for beef and live cattle with Canada could reach an all-time high of 1.45 billion pounds,” he said.  This trade deficit would surpass the previous high in 1998, the year when the U.S. cattle industry filed a cattle dumping and trade subsidy investigation against Canada.  It would also far surpass the 300 million pound level of 1987, set just prior to the U.S.-Canadian Free Trade Agreement that phased out tariffs and quotas on live cattle and beef imports from Canada.

Reprinted by permission of R-CALF USA