U.S. Beef Exports Remain Strong
by James G. Robb, Livestock Marketing Information Center director
Worldwide, beef trade this year has been impressive. For April, the U.S. and Australia lead the way regarding gains in tonnage of beef sold compared to a year ago. In terms of value, the U.S. remained the top exporter of beef and variety meats and posted a 20 percent dollar-value increase compared to a year earlier. Foreign markets for beef industry products continue to grow, especially in Asia.
Last week, USDA’s Economic Research Service (USDA-ERS) published the U.S. monthly meat and poultry trade data for April. Those data are on a carcass weight equivalent basis. Both beef and pork export tonnage exceeded expectations, while chicken remained lackluster. At 254 million pounds, U.S. beef exports during April were 16 percent above 2017’s and the largest ever for that month. U.S. beef imports declined year-over-year by 6 percent.
USDA-ERS reported that the U.S. sold beef directly to 93 different countries during the month of April. In order of size, the top six destinations were: Japan, South Korea, Mexico, Canada, Hong Kong, and Taiwan. Year-over-year, large percentage gains occurred to Mexico (rising 31 percent), Taiwan (up 19 percent), Canada (increasing 11 percent), and Japan (up 9 percent).
Surging U.S. pork exports helped mitigate the amount competition beef faced at the domestic meat case from pork. April’s tonnage was 548 million pounds (carcass weight basis), which was the largest monthly number ever. Tonnage sold to Mexico, the largest market for U.S. pork, was record-large in April (182 million pounds) and increased a dramatic 41 percent from a year ago.
In the U.S. wholesale meat marketplace, robust exports have been a factor cushioning beef prices against large supplies. Will that situation continue? In the World Agricultural Supply and Demand Estimates (WASDE) issued last month by the USDA, their forecast was for U.S. beef exports in 2018 to be 3.03 billion pounds, 6 percent above 2017’s. That would be the first time for foreign sales to exceed 3 billion pounds. Year-to-date trends are on the path to reach that level.
WASDE forecasts can only incorporate “current known” U.S. policy and that of foreign governments. Of course, in the last 30 days, the unknowns regarding trade policy and hence implication on U.S. meat exports have greatly increased. The new WASDE will be released on Tuesday (June 12), clear-cut assessments of the trade environment may be several months down the road.
More than just insights into actual policy changes and tariff rates are required to forecast exports. For example, in the current world economic environment, exchange rates adjustments can have a significant impact on the price paid by a foreign buyer for U.S. agricultural products. Exchange rates are determined by macroeconomic forces and by sectors much bigger than the agriculture and food trade sphere. That is, exchange rates are realistically exogenous, using an economics term, to the trade of agricultural and food products. The value of the Mexican peso could drop versus the U.S. dollar, mitigating, at least partially, the short-term impacts of any new tariffs on U.S. exports to that country.
Note: Thank you to Mr. Robb for providing the above commentary while Dr. Peel returns from a study of China’s agriculture.
“Preg” check and cull replacement heifers early
by Glenn Selk, Oklahoma State University Emeritus Extension animal scientist
Many Oklahoma ranchers choose to breed the replacement heifers about a month ahead of the mature cows in the herd. In addition, they like to use a shortened 45 to 60-day breeding season for the replacement heifers. The next logical step is to determine which of these heifers failed to conceive in their first breeding season. This is more important today than ever before.
As the bulls are being removed from the replacement heifers, this would be an ideal time to call and make arrangements with your local veterinarian to have those heifers evaluated for pregnancy in about 60 days. In two months, experienced palpaters should have no difficulty identifying which heifers are pregnant and which heifers are not pregnant (open). Those heifers that are determined to be “open” after this breeding season, should be strong candidates for culling. Culling these heifers immediately after pregnancy checking serves three very economically valuable purposes.
- Identifying and culling open heifers early will remove sub-fertile females from the herd. Lifetime cow studies from Montana indicated that properly developed heifers that were exposed to fertile bulls, but DID NOT become pregnant were often sub-fertile compared to the heifers that did conceive. In fact, when the heifers that failed to breed in the first breeding season were followed throughout their lifetimes, they averaged a 55 percent yearly calf crop. Despite the fact that reproduction is not a highly heritable trait, it also makes sense to remove this genetic material from the herd so as to not proliferate females that are difficult to get bred.
- Culling open heifers early will reduce summer forage and winter costs. If the rancher waits until next spring to find out which heifers do not calve, the pasture use and winter feed expense will still be lost and there will be no calf to eventually help pay the bills. This is money that can better be spent in properly feeding cows that are pregnant and will be producing a salable product the following fall.
- Identifying the open heifers shortly after (60 days) the breeding season is over will allow for marketing the heifers while still young enough to go to a feedlot and be fed for the choice beef market. “B” maturity carcasses (those estimated to be 30 months of age or older) are very unlikely to be graded Choice and cannot be graded Select. As a result, the heifers that are close to two years of age will suffer a price discount. If we wait until next spring to identify which two-year-olds did not get bred, then we will be culling a female that will be marketed at a noticeable discount compared to the price/pound that she would have brought this summer as a much younger animal.
Certainly the percentage of open heifers will vary from ranch to ranch. Do not be concerned, if after a good heifer development program and adequate breeding season, that you find that 10 percent of the heifers still are not bred. Resist the temptation to keep these open heifers and “roll them over” to a fall-calving herd. These are the very heifers that you want to identify early and remove from the herd. It just makes good economic business sense to identify and cull non-pregnant replacement heifers as soon as possible.