Fewer feeder cattle to be imported from Mexico, along with fewer fed cattle from Canada.

Krissa Welshans 1, Feedstuffs Editor

November 17, 2016

4 Min Read
LIVESTOCK MARKETS: Fewer cattle imports in 2016

Derrell Peel, Oklahoma State University Extension livestock marketing specialist, reported that total cattle imports from Canada and Mexico are down 19.8% year over year for the first 10 months of the 2016, including a 13.9% decrease from Canada and 24.3% fewer cattle from Mexico compared to one year ago.

Total cattle imports for the year to date include slaughter cattle, which are up 10.9% through September.  Slaughter cattle account for 31.5% of total cattle imports so far in 2016, up from 22.7% of total imports for the same period last year. Peel said virtually all slaughter cattle imports are from Canada and include slaughter steers and heifers, up 37.7% year over year through September, and slaughter cows and bulls, down 5.1% from last year.

For the year to date, fed cattle account for 58.7% of total slaughter cattle imports compared to 49.5% last year.  Fed cattle imports through September include a 62.1% year-over-year increase in slaughter heifers and a 22.8% year-over-year increase in slaughter steer imports.  Peel noted that the sharp increase in slaughter heifer imports from Canada this year means that slaughter heifers account for 44.5% of total fed cattle imports compared to 37.8% during the same period last year.

“Increased imports of slaughter steers and heifers in 2016 follows as a result of the 31.7% annual decrease in feeder cattle imported from Canada in 2015,” he said.

Feeder cattle imports from Canada this year are down 42.7% through September compared to the same period last year.  The total includes a 36.6% decrease in feeder heifer imports and a 46.3% decrease in feeder steer imports.  Unlike 2015, Peel said the decrease in feeder cattle moving to the U.S. from Canada has not been offset with increased feedlot production in Canada. 

Cattle on feed in the major cattle feeding regions of Alberta and Saskatchewan were down 17.7% in October compared to last year and feedlot placements from May through September were down 21.1% compared to the same period one year earlier. Peel said this follows the September announcement that the largest cattle feeding operation in Canada, which is located in Alberta, is not placing additional cattle and will close in early 2017. 

“It appears that a significant number of Canadian feeder cattle may yet be in the country and will likely come to the U.S. at some point.”

Cattle imports from Mexico, virtually all feeder cattle, are down 24.3% for the year to date through September compared to 2015.  This total includes a 43.3% year-over-year reduction in feeder heifer imports and a 21.6% decrease in steer imports. 

“Fewer cattle imports from Mexico reflect, in part, the increased demand for feeder cattle in Mexico as a result of significant expansion in feedlot and packing capacity in recent months,” Peel said. “However, in additional to market price adjustments in all North American markets recently, the  sharp drop in the value of the Mexican Peso since the election may stimulate more Mexican feeder cattle exports to the U.S. than would have otherwise occurred.”

Peel said dynamic market conditions can have a major impact on cattle flows in the short term but the longer term structural changes suggest fewer feeder cattle will be imported from Mexico along with fewer fed cattle from Canada.  This will be partially offset by more Canadian feeder cattle moving to the U.S., he added.

Market recap

The December fed cattle future market was mostly higher this week. Nearby contracts closed higher Monday and Thursday at $105.575/cwt. and $108.225/cwt., respectively.

November feeder cattle futures were also mostly higher. Nearby contracts closed higher Monday at $126.025/cwt. and climbed to an unchanged close of $126.975/cwt. on Thursday.

For the beef cutouts this week, Choice was lower at $182.31/cwt., and Select was lower at $167.10/cwt.

December lean hog futures were mostly lower, but did experience a rally Wednesday before falling again. Nearby contracts closed lower Monday and Thursday at $46.90/cwt. and $47.45/cwt., respectively.

Pork cutout values were mostly lower this week. The wholesale pork cutout was lower at $72.23/cwt. Loins were higher at $66.53/cwt., while bellies were nearly 10 cents lower at $99.70/cwt. Hams were also lower at $69.55/cwt.

Hogs delivered to the western Corn Belt were lower this week, closing at $40.82/cwt. on Thursday.

In the poultry markets, the Georgia dock was lower Wednesday at $1.0975/lb. Breast meat was lower at $1.4050/lb. Leg quarters were unchanged at 30.5 cents/lb., while wings were higher at $1.55/lb.

According to USDA, egg prices have been steady, with a sharply lower undertone. Offerings and supplies have been mostly moderate to heavy. Demand has been light to fairly good.

Large eggs delivered to the Northeast were lower at 67-71 cents/doz. Prices in the Southeast and Midwest were also lower at 66-69 cents/doz. and 59-62 cents/doz., respectively. Large eggs delivered to California decreased to $1.26/doz.

For turkeys, USDA said the market was steady to weak. Offerings for hens have been light to moderate, while tom offerings have been light to moderately heavy. Demand has been light. Prices for hens and toms were lower at $1.14-1.26/lb. and $1.04-1.25/lb., respectively.

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