Derrell S. Peel, Oklahoma State University

U.S. beef trade continues to evolve in the face of a unique domestic cattle market situation.  Beef exports in February were down 1.3 percent year over year with the two-month total thus far in 2024 down 2.6 percent.  This follows a 2023 year over year decrease of 14.3 percent from record 2022 beef exports.  Beef exports in the first two months of the year are down year over year from most of the top markets; including number one Japan, down 13.5 percent; number two South Korea, down 5.5 percent; and number three China/Hong Kong, down 2.6 percent.  Additionally, Canada, the number five market is down 2.0 percent thus far in 2024, along with number six Taiwan, down 7.5 percent year over year.  Mexico, which had been the number three market as recently as 2019, is currently the number four market but recovering.  Beef exports to Mexico are up 20.7 percent in January-February, following a 12.2 percent year over year increase in 2023.

Beef imports in February were up 23.8 percent year over year and are up 31.9 percent in the first two months of the year.  This follows a 9.9 percent year over year increase in beef imports in 2023.  Beef imports this year are led by Brazil, who jumps out strongly to fill the “other country” quota early in the year, with shipments moderating after two or three months in the face of the over-quota tariff.  Imports from Brazil are up 41.8 percent year over year thus far in 2024.  Imports from Australia are up sharply so far this year, with a year over year increase of 111.3 percent, still narrowly the number three country as a beef import source.  Canada is the number two import source, slightly ahead of Australia and up 9.0 percent year over year.  New Zealand is the number four beef import source and is up 48.6 percent thus far in 2024.  Mexico is the fifth largest source of beef imports, down 16.9 percent in January-February after decreasing 12.4 percent year over year in 2023.  Uruguay is the number six beef import source and is up 90.9 percent year over year thus far in 2024.

Beef exports continue to face headwinds as beef production decreases and beef prices increase in the U.S. market.  A generally strong U.S. dollar adds additional headwinds, making U.S. beef imports more expensive to international customers.  At the same time, decreasing domestic beef supplies in the U.S., coupled with higher prices, attracts additional beef imports, with the strong dollar adding additional incentive for beef imports.  As is typical, beef imports are heavily dominated by imports of lean processing beef to supplement decreasing supplies of nonfed beef in the U.S.  Decreasing lean beef supplies, coupled with strong ground beef demand in the U.S. is pushing 90 percent lean prices (and ground beef prices) to record levels.  Fed beef (steer and heifer) production is declining, but the large percentage of yield grade 4 and 5 in feedlot cattle means that the supply of fatty (50 percent lean) trimmings is high relative to lean beef supplies and stimulating strong demand for domestic and imported lean processing beef to increase ground beef production.