LUBBOCK, TEXAS (RFD NEWS) — Ranchers are facing mixed signals as U.S. beef imports run at record levels while the domestic cattle herd remains tight. The American Farm Bureau Federation (AFBF) says the U.S. imported 562,000 metric tons of beef and beef products during the first quarter, valued at nearly $4.5 billion.
AFBF says imports were up 18 percent from last year and 122 percent higher than five years ago. The concern is a possible 200-day suspension of beef tariff-rate quota limits, which could allow more imports to enter at lower tariff rates.
Most imported beef is a lean, boneless product, and trimmings are used for ground beef blending. That means added imports may weigh more on ground beef than on premium cuts.
Domestic rebuilding remains difficult. AFBF says more than 79 percent of the beef cow herd across the 26 largest cattle-producing states is affected by drought.
More import access may help short-term supply, but it could also discourage heifer retention and long-term herd rebuilding.
Some analysts believe the cattle industry may be moving in the right direction toward rebuilding the national herd, but others say the latest data suggests a more cautious outlook. Market analyst Shayle Stewart says last month’s USDA Cattle-on-Feed report pointed to a largely neutral picture for the industry.
“Seeing that quarterly number at 37% was just kind of a neutral factor. I believe that there are pockets in the U.S. where we are seeing some minor rebuilding occur,” Stewart said. “But I also believe that we are seeing — and we will continue to see in the weeks ahead, if we do not get the moisture that we desperately need — whether it be young cows let go, less desirable stock let go, or just the liquidation of some older cows to maybe hit that hamburger market. But really, I’m not comfortable saying that the herd has truly begun to be rebuilt yet.”
Stewart says a number of outside pressures continue to weigh on producers as the industry heads into summer, potentially slowing any rebuilding efforts already underway.
“I believe we’re in a neutral phase just simply because we don’t have enough positive factors to push the cycle into growth mode. There are areas where that is indicative and where that is possible, but to say that the entire industry is doing so is not something that I think anybody would step out and say just because there are too many external factors that weigh against the marketplace at this time,” Stewart explained. “We have the war in Iran; we have fuel prices too high; interest rates are not low. We do not know what’s going to happen in regards to drought this summer. Feed prices in regards to the corn complex — they look like they’re going to be relatively affordable. But you know what? Time changes things.”
Stewart also noted the next USDA report could appear somewhat distorted compared to the same period last year. She pointed to the temporary reopening of the U.S. border to Mexican cattle imports as a factor that may impact year-over-year comparisons.
The next USDA Cattle-on-Feed report is scheduled for release on Friday, May 22, at 3 p.m. ET.
