U.S. beef markets have come under price pressure, and imports have played significant role in total supply.

January 27, 2016

4 Min Read
Beef: It's what's for import


THE cattle markets have started to feel the same downward price pressures that have weighed on nearly every commodity market. From oil to corn and soybeans, “too much” production has been a common theme.

Right while the cattle industry was looking to rebuild the cow herd, a recent surge of beef imports has also added to the beef supply. This analysis takes a look at how significant beef imports have been.

Beef imports


Using data from the U.S. Department of Agriculture's Foreign Agricultural Service (FAS), Figure 1 shows beef imports from 1960 to 2015. From the 1970s to the late 1990s, annual beef imports were around 1 million metric tons of carcass weight equivalent (mmt CWE). From 1996 to 2004, beef imports increased from 940,000 mt to 1.669 mmt CWE. Imports then retreated toward 1 mmt CWE and stayed in that trading range through 2013.

Since 2013, imports have been on the rise. From 2013 to 2015, beef imports increased from 1.020 mmt CWE to 1.559 mmt CWE. This two-year increase is a staggering 53% jump.

Suffice it to say that beef imports, which were fairly stable from the 1970s to the late 1990s, have been through some pretty dramatic changes in the last 20 years.

Impact on supply


While the total tons of beef imports have changed, it's important to consider imports relative to the total supply of beef. Figure 2 shows beef imports as a share of the total annual beef supply. Similar to the trends in Figure 1, beef imports accounted for about 8% of the total supply from the 1970s to the mid-1990s. Imports, as a share, expanded during the late 1990s through 2004 before retreating to around 8% again. Currently, imports account for 12% of the annual supply — slightly less than the record levels of 13% set in 2004.

It is worth noting that from 2014 to 2015, the rise in imports played a very important role in beef availability. FAS reported that U.S. beef production in 2015 was 215,000 mt CWE less than in 2014, or nearly 2% lower. However, beef imports were up 222,000 mt CWE, or more than 16%, which more than offset the lower production.

Strong dollar at play?

In thinking about these beef import trends, the question came to mind if a strong dollar could be at work. The annual trade-weighted U.S. dollar index is shown in Figure 3. The similarities between the increase in beef imports and a stronger dollar are quite striking. With all else remaining equal, a strong dollar creates more purchasing power and makes it relatively cheaper to buy imports such as beef.


Looking over the last 20 years, beef imports and the strength of the dollar have trended in similar directions. Both rose in the late 1990s, fell during the late 2000s and have been on the rise again. The greatest difference between the dollar and beef imports is that the dollar's indexed value peaked in 2002 and began to drop, while beef imports peaked in 2004.

Of course, this analysis is not nearly sufficient enough to suggest, or prove, that surging beef imports were caused exclusively by a strong exchange rate. This is, however, simply highlighting the similarities and broad-level correlation.

Wrapping it up

As the U.S. beef markets have recently come under price pressure, the role imports have played in the total U.S. supply of beef has been significant. Currently, imports — measured in absolute (Figure 1) and relative (Figure 2) terms — are historically high and rivaling the record levels set in 2004.

Given the role a strong exchange rate plays in making imports relatively cheaper, it's worth noting the relationship between beef imports and a strong dollar (Figure 3). Often, a strong dollar is cited as creating challenges for agricultural exports, especially for grains. In this case, a strong dollar could also create downward price pressure by making imports accessible and abundant.

The strength of the dollar into 2016 will be an important trend for the beef industry to monitor.

*David Widmar is an agricultural economist specializing in agricultural trends and producer decision-making. Through his research, he supports agribusinesses and farmers in their strategic and planning efforts. He is a managing partner of his family farm in eastern Kansas and a researcher with the Center for Commercial Agriculture at Purdue University. Widmar received his bachelor's degree from Kansas State University and his master of science degree from Purdue University, both in agricultural economics.

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