Weak foreign demand and a stronger US dollar are effecting exports, with beef exports to Mexico down 19% and exports to Canada down 15% from a year ago. Exports to South Korea are also lower since the beginning of the year on a weak economy that has limited their imports from all sources. A bright spot in the export picture is Japan, where an appreciating yen against the dollar has kept US beef affordable.
In 2010, exports are expected to increase just over 9%, to 1.91 billion pounds, as the global economy recovers from the current recession the USDA predicted.
Meanwhile, US beef imports are expected to rise 12% in 2009 to 2.84 billion pounds, largely driven by a 55% in imports from Australia year-to-date to April.
Domestically, beef continues to face stiff competition from cheaper pork and poultry.
Commercial versus dairy slaughter
Commercial beef cow slaughter will likely continue below year-earlier levels as cow-calf producers appear reluctant to increase cow inventories by retaining replacement heifers, USDA predicted.
Second-quarter 2009 total commercial cow slaughter could be down slightly from the second quarter of 2008. However, commercial dairy cow slaughter will increase as a result of liquidation in response to poor returns.
In the second quarter of 2009, increased dairy cow slaughter could offset much, but likely not all, of the reduction in commercial beef cow slaughter due to the producer-funded Cooperatives Working Together program. Combined commercial beef and dairy cow slaughter for the last half of 2009 is expected to be greater than in second-half 2008 as a result of continued heavy dairy cow slaughter and a seasonal increase in beef cow slaughter.
US beef exports expected to fall
US beef exports are expected to decline about 8% in 2009 to 1.74 billion pounds (weight) the USDA have predicted in their Livestock, Dairy, Poultry Outlook report.