2000 Beef Exports Increase 7.7% in Volume; 10.6% in Value
by Chuck Lambert
March/April 2001
Summary
US beef and beef variety meat exports during 2000 increased 7.7 percent in volume, and 10.6
percent in value compared to exports during 1999. NCBA is aggressively working to gain access to the
European Community, to maintain access to the market in Mexico, for China's accession to the WTO and
to have export data released in a more timely manner.
Background
US beef exports (including variety meats) during 2000 reached a record 1.244 million metric
tones valued at more than $3.6 billion. By comparison, exports during all of 1999 totaled 1.155 million
metric tons valued at $3.26 billion. Traditional primary export markets Japan, Mexico, Canada and the
Republic of South Korea accounted more than 81.6 percent of export tonnage and 91.1 percent of the
export value. Exports to Mexico and Korea continued to grow after rebounding sharply during 1999.
Russian trade data has been revised to account for 1999 food-aid shipments. Now that the Senate has
approved Permanent Normal Trading Relations (PNTR) China is projected to become an increasingly
important export market once they join the WTO -- projected by mid-2001.
U.S. Beef Exports to Primary Markets: 1999 vs. 2000
Volume (Thousand Metric Tons)
Value (Million Dollars)
Beef
Japan
Mexico
S. Korea
Canada
Egypt
Russian Fed.
HK/China
Tiawan
EU
1999
358.92
158.05
106.27
85.00
6.67
31.03
13.52
10.69
6.30
2000
368.01
178.75
143.46
87.48
2.18
12.07
16.29
11.96
4.98
% Change
2.53
13.09
35.00
2.91
-67.29
-61.11
20.52
11.84
-20.94
1999
1,364.55
454.05
330.95
273.26
21.74
70.56
44.61
43.79
28.52
2000
1,466.54
530.77
506.20
299.25
5.55
21.66
59.80
52.98
20.47
% Change
7.47
16.90
52.95
9.51
-74.47
-69.30
34.07
21.00
-28.22
803.96
852.03
5.98
2,724.01
3,049.18
11.94
1999
150.24
49.91
7.37
11.08
37.89
20.74
9.92
3.14
16.76
2000
158.25
49.81
18.53
11.02
17.46
31.41
19.46
8.81
23.51
% Change
5.33
-0.19
151.45
-0.52
-53.93
51.50
96.20
180.99
40.32
1999
353.15
58.51
12.47
58.51
21.80
16.34
16.27
6.57
6.21
2000
318.59
65.40
30.73
65.40
11.29
24.59
31.73
11.15
9.15
% Change
-9.78
11.77
146.50
11.77
-48.19
50.49
95.04
69.65
47.30
351.33
392.19
11.63
535.52
555.44
3.72
.
All U.S.
Variety Meats
Japan
Mexico
S. Korea
Canada
Russian Fed.
Egypt
HK/China
Tiawan
EU
All U.S.
Beef Plus Variety Meats
Japan
Mexico
S. Korea
Canada
Egypt
Russia Fed.
HK/China
Tiawan
EU
1999
509.16
207.96
113.64
96.08
27.41
68.92
23.44
13.83
23.05
2000
526.26
228.56
161.98
98.50
33.60
29.52
35.76
20.77
28.49
% Change
3.36
9.91
42.55
2.52
22.57
-57.16
52.55
50.19
23.58
1999
1,717.69
512.56
343.42
331.77
38.08
92.36
60.88
50.36
34.74
2000
1,785.13
596.17
536.93
364.64
30.14
32.95
91.54
64.13
29.63
% Change
3.93
16.31
56.35
9.91
-20.85
-64.32
50.37
27.35
-14.71
All U.S.
1155.30
1,244.22
7.70
3,259.53
3,604.61
10.59
Note: % Change is change from 1999 in percent, i.e., beef volume exported to Canada in 2000 increased
2.9 percent; beef volume exported to Mexico increased 13.1 percent, etc. Russian data has been
adjusted to account for 1999 food aid shipments.
Key Points
Beef exports are a key component of total beef demand. NCBA is aggressively working to gain
access to emerging markets and to have export data released in a more timely manner.
Is a Moratorium on Imports the Answer?
By: Chuck Lambert & Gary Weber
March/April 2001
Summary
Certain sectors of the US beef industry and some members of Congress have proposed a
moratorium on the imports of beef and cattle (others have broadened the request to all meats and
livestock) in the interest of protecting US herd health from introduction of BSE and FMD. The industry
is very aware of the need to protect herd health and has supported science-based controls on meat and
animal trade to assure that herd health is not put at risk. Less focus has been placed on the greater risk of
human traffic from FMD countries and assuring that the Animal and Plant Health Inspection Service
(APHIS) has adequate funding and other critical resources for monitoring and surveillance at airports,
seaports and other points of entry to control these situations.
Background
Who are the primary suppliers and what controls do they have in place? Three countries, Australia,
Canada and New Zealand, account for 87.4 percent of US beef import tonnage. Australia and New
Zealand are rated as less likely to have BSE than the US or Canada because TSEs are not present in those
countries. Canada, the US, Mexico and other Western Hemisphere countries are rated as very unlikely to
have a case of BSE. None of these countries have FMD and all have restrictions on imports of meat and
animals and on the feeding of animal-based proteins comparable to, or stricter than, the US.
Two countries, Canada and Mexico, account for 100 percent of US live cattle imports. These countries
are free from BSE and FMD and both have restrictions on imports of meat and animals and on the feeding
of animal-based proteins comparable to, or stricter than, the US. NCBA leadership meets on an on-going
basis with leadership of the cattle industry in Mexico and with government officials in Mexico to
emphasize that it is absolutely critical import and feed-ban regulations are implemented and strictly
enforced. The latest meeting was March 7-9, 2001 between NCBA leadership and SAGAR (Mexico
Department of Agriculture) officials in Mexico City.
FMD has been eradicated from North America, including all Central American countries and a 50-mile
wide animal-free zone (the Darien Gap) is maintained at the southern tip of Panama to ensure FMD is not
transmitted from South American countries. No cases of BSE have been identified in the Western
Hemisphere and all beef-exporting countries have implemented restrictions on imports of meat and
animals and the feeding of animal-based proteins comparable to or stricter than the US.
What about the other 12.6 percent of meat imports? Argentina and Uruguay supply 5.6 percent of US
beef imports and are currently rated FMD-free. Argentina recently began vaccinating livestock in the
northern region to strengthen a barrier on the border with Brazil. USDA most recently evaluated and reconfirmed FMD conditions in Argentina during March 2001. Even though these countries are rated
FMD-free all fresh, chilled or frozen beef exported from Argentina and Uruguay to North or Central
America must continue to be certified as meeting the following specifications to further assure that no
FMD virus could be introduced:
 Has not been in contact with meat from a region with greater disease risk;
 Originates from premises where neither FMD nor rinderpest have been present during the life of any
ruminants or swine slaughtered for export;
 Originates from premises on which ruminants or swine have not been vaccinated with modified or
attenuated live viruses for FMD during the lifetime of any animals slaughtered for export;
 Must be from animals not vaccinated for other specific diseases;
 Must be from carcasses that have been allowed to mature at 40 to 50 degrees Farenheit for a
minimum of 36 hours after slaughter and have dropped to at least a pH of 5.8 or below in the loin
muscle at the end of maturation.
 Must be free of all bone, blood clots and lymphoid tissue.
APHIS has been conducting unannounced site inspections in Argentinean packing plants to verify that
these steps are in place
Brazil accounts for 4.25 percent of US beef imports. Because Brazil has not achieved FMD-free status
without vaccination, beef imported from Brazil must be cooked, canned or preserved. A NAFTA -- US,
Canada and Mexico -- evaluation team completed evaluation of the BSE status in Brazil during February
2001 and determined that there is not a BSE risk in Brazil.
This leaves 2.75 percent of beef imports (or less than 3-tenths of one percent of the total US beef supply)
to be addressed. This beef is primarily imported from Central American countries, mostly Nicaragua and
Costa Rica that are free of BSE and FMD and have restrictions on imports of meat and animals and on the
feeding of animal-based proteins comparable to the US. USDA also conducts surveillance and
monitoring activities throughout Central America for foreign animal diseases and pests.
Doesn't vaccination in northern Argentina and continued shipment from southern regions that do not
vaccinate (regionalization) put the US at risk? NCBA supports trade rules based on science and there is
no science-based risk associated with this trade practice, especially since processing requirements (bottom
of prior page) are also in place. Regionalization also has other implications. If, for example without
regionalization, if an isolated case of FMD occurred in a swine-herd in an eastern US state, US beef
exports from the Texas to Nebraska corridor and from Iowa and Colorado or the Northwest would be
stopped. With regionalization they could continue. NCBA supports regionalization and the use of risk
reduction measures based on science to ensure that trade will not expose the US to FMD and other foreign
animal diseases.
OK, if beef and cattle imports aren't the primary risk factors where should we focus?
It is imperative that USDA continues to protect the health of the U.S. beef herd. USDA must assure that
all conditions are met and that the necessary controls are in place so U.S. herd health is not put at risk.
 In today's mobile society the risk of tourists, pets and visitors from foreign counties that have recently
been on farms is greater than risks posed by imports of beef and cattle. Assuring that inspection and
customs clearance procedures are strictly enforced is vital.
 The APHIS budget for Veterinary Services (VS) that conducts inspections at airports and seaports has
been cut over time. The same is true for research budgets related to foreign animal diseases. It is
critical that USDA budgets and resources for animal disease monitoring, surveillance and research are
increased and NCBA supports efforts to that end.
 The US does not import beef from Europe due to concerns about BSE and has not for some time, so
FMD exposure from European beef imports is not a factor. However, the US is a major importer of
pork from Denmark and the Netherlands. NCBA is closely monitoring the spread of FMD in the UK
and into Ireland. To date, no cases of FMD have been reported on Continental Europe. If cases are
reported, especially if they are in Denmark, the Netherlands or other pork-exporting countries, we are
prepared to work with USDA/APHIS to assure that US herd health is not put at risk.
Key Points
NCBA's primary concern is that all conditions are met and that the necessary controls are in place
so U.S. herd health is not put at risk. The US does not import any cattle or beef from countries that do not
meet our animal health and safety regulations. NCBA has been in close contact with members of
congress and with APHIS as these issues have evolved and has worked with industry leadership and
government officials in other countries to assure that animal health and feed regulations are in place and
enforced. It is critical that USDA budgets and resources for animal disease monitoring, surveillance and
research are increased and NCBA supports efforts to that end.
Percent of 2000
US Beef Import Volume
Uruguay Other
Argentina
1.98% 2.35%
New
3.60%
Zealand
20.99%
Canada
33.03%
Mexico
0.10%
Australia
33.69%
Brazil
4.25%
2000 Beef Imports Increase 5.6% in Volume; 12.3% in Value
by Chuck Lambert
March/April 2001
Summary
US beef and variety meat imports increased 5.6 percent in tonnage and more than 12.3 percent in
value during 2000 compared to 1999. Major suppliers continue to be Canada, Australia and New Zealand,
with those three countries accounting for approximately 87 percent of the beef tonnage and value
imported by the US. Australia has a 378,214 metric ton tariff-rate quota and New Zealand has a tariff-rate
quota of 213,402 metric tons. Uruguay and Argentina were declared free of foot-and-mouth disease
(FMD) in 1987 and became eligible to export fresh, chilled and frozen beef to the United States under
USDA guidelines at that time.
US, Canadian and other North American imports of fresh, chilled and frozen beef from Argentina
were suspended August 10, 2000 due to positive serology readings on two cattle reportedly smuggled into
Argentina from Paraguay. Uruguay voluntarily suspended exports August 26, 2000 among concerns that
FMD had affected herds there. During the last half of December USDA re-certified both countries as
eligible to ship fresh, chilled and frozen beef to the US. Quotas of 20,000 metric tons generally limit the
exports of fresh and frozen beef to the US from Argentina and Uruguay, however cooked and processed
beef may be shipped without quota restrictions. Because Brazil has not achieved FMD-free status, beef
imported from Brazil must be cooked, canned or preserved. Brazil's initiative to attain FMD-free status
suffered a setback with an FMD outbreak in November and will be delayed indefinitely. During 1999
Argentina and Uruguay filled their tariff rate quotas.
Beef Imports from Primary Suppliers: 1999 vs. 2000
Volume (Thousand Metric Tons)
Value (Million Dollars)
1999
2000 % Change
Canada
345.07
335.40
-2.80
Australia
288.74
342.08
18.47
New Zealand
186.93
213.13
14.02
Brazil
50.38
43.11
-14.42
Argentina
44.84
36.57
-18.45
Uruguay
21.50
20.15
-6.24
Mexico
4.79
5.20
8.63
Other
21.40
23.90
11.65
Total US Beef Imports
963.65
1019.55
5.80
Variety Meats
35.17
34.79
-1.07
Total US Imports: Beef + Variety Meats
998.82
1054.34
5.56
1999
937.64
505.97
335.77
122.13
125.56
46.38
16.53
45.88
2000 % Change
982.26
4.76
670.11
32.44
430.11
28.10
91.95
-24.71
108.82
-13.33
46.20
-0.37
19.01
15.02
52.84
15.16
2,135.85
79.30
2,401.30
87.14
12.43
9.89
2,215.15
2,488.43
12.34
Percent of 2000
US Beef Import Value
Other
ArgentinaUruguay
2.20%
1.92%
New
4.53%
Zealand
17.91%
Canada
40.91%
Mexico
0.79%
Australia
27.91%
Brazil
3.83%
Key Points
Higher US beef prices and stronger demand have resulted in larger US beef imports. NCBA will
continue to monitor and report cattle and beef trade to the industry and assure that trade flows are legal
under existing trade agreements and laws. NCBA will work to assure that all requirements are met and
that verification methods are in place before access to the US beef market is granted to Argentina,
Uruguay, Brazil or other beef exporting countries.
Producer Share Highest in Five and a Half Years as Fed Cattle Prices Rally
by Chuck Lambert
March/April 2001
Summary
The packer’s and retailer's share of beef’s retail value continued to decrease as fed cattle prices
increased in December and January. The retailer's share decreased to 37.2 percent during December 2000
after reaching a near-record 45.6 percent in September. During December and January the packer’s share
of beef’s retail value remained below the trend line at 8.8 percent. The record high packer share was in
August 1998 at 12.4 percent. The total marketing share during December and January was 54 and 53.5
percent respectively. Producers received the highest percent of beef’s retail value since September and
October 1996 as fed cattle prices increased because of smaller supplies of market-ready cattle due to
weather impacts on cattle performance.
Background
USDA data show that the retailer's share of beef’s retail value has generally increased from the 35
to 38 percent range common during the first half of 1993. Retail margins declined to those levels during
December 2000 and January 2001 in spite of continued modest inflation in costs for labor, utilities and
other variable and fixed costs. The retail spread was a record 46.1 percent during December 1998, and
was reported at 37.2 percent during December 2000 and 37.8 percent during January 2001. During 1997
the packer spread averaged 7.3 percent -- compared to 7.9 percent during 1995 and 1996. An increased
packer's share of beef’s retail value to the 8 to 10 percent range is consistent with the trend to further
fabrication, case-ready pre-packaged beef and increased value-added close-trimmed boxed beef.
USDA includes by-product values in packer spreads and in the total “retail” value of products.
The packer spread is calculated as the sum of by-product values plus the value of boxed beef minus the
cost of fed cattle. Part of the increase in packers’ share of retail value prior to 1997 was due to an increase
in by-product values to more than $100/ head during most of 1996 and 1997. The financial crisis in Asia
reduced export demand for variety meats and lowered hide values. May 1999 by-product values declined
to a new five-year low price level of $7.68/cwt. and have continued recovery to the $9.50/cwt. range. Byproduct values were $9.46/cwt. during January 2001 -- the fifth month they have been above $9.00 since
August 1998.
Total packer gross margins (combination of boxed beef and by-products) during April 1998 at
$65.85/head were the lowest since February 1995, but rebounded to a new record $170.34/head during
June 2000. Packer gross margin was $127.65/head during January 2001.
Key Points
As packers continue to add value – for example, through closer trimming, more boneless cuts,
branded products, improved packaging, and ultimately, branded case-ready products -- the packer's share
of the total retail value of beef will increase. As value is added by further processing, the value of the raw
product (cattle, in the case of beef production) declines as a percent of the total value of the end product.
However, this does not mean that the amount that producers receive declines, in fact, it is likely to
increase because the end product will be worth more because of the added value.
Hide and other by-product values contribute to the packers’ share of total value. Packers have
added value to by-products through blue chrome tanning of hides and developing international markets
for beef variety meats. The Asian and Russian crises resulted in lower prices for hides and variety meats
but those products have continued price recovery since 1999.
These spreads do not account for costs and therefore say nothing about the net profitability of any
sector. The National Cattlemen’s Beef Association will continue to actively work to eliminate flaws and
improve accuracy and timeliness of USDA data and monitor spreads to assure that normal seasonal
patterns are in place.
Jan '93
May '93
Sept '93
Jan '94
May '94
Sept '94
Jan '95
May '95
Sept '95
Jan '96
May '96
Sept '96
Jan '97
May '97
Sept '97
Jan '98
May '98
Sept '98
Jan '99
May '99
Sept '99
Jan '00
May '00
Sept '00
Jan '01
10
8
6
Percent
12
4
2
40
30
$100
$80
$40
Month/Year
By-product Value ($/head)
Live to Cutout Spread ($/head)
Jan '93
May '93
Sept '93
Jan '94
May '94
Sept '94
Jan '95
May '95
Sept '95
Jan '96
May '96
Sept '96
Jan '97
May '97
Sept '97
Jan '98
May '98
Sept '98
Jan '99
May '99
Sept '99
Jan '00
May '00
Sept '00
Jan '01
45
Percent
Jan '93
May '93
Sept '93
Jan '94
May '94
Sept '94
Jan '95
May '95
Sept '95
Jan '96
May '96
Sept '96
Jan '97
May '97
Sept '97
Jan '98
May '98
Sept '98
Jan '99
May '99
Sept '99
Jan '00
May '00
Sept '00
Jan '01
Percent
Packers Share of Beef's Retail Value
60
Total Marketing Spread for Beef
65.0
55
60.0
50
55.0
Month/Year
Monthly Packer Spreads, 1993-'01
$160
$140
Jan '93
May '93
Sept '93
Jan '94
May '94
Sept '94
Jan '95
May '95
Sept '95
Jan '96
May '96
Sept '96
Jan '97
May '97
Sept '97
Jan '98
May '98
Sept '98
Jan '99
May '99
Sept '99
Jan '00
May '00
Sept '00
Jan '01
$120
$/Cwt.
Jan '93
May '93
Sept '93
Jan '94
May '94
Sept '94
Jan '95
May '95
Sept '95
Jan '96
May '96
Sept '96
Jan '97
May '97
Sept '97
Jan '98
May '98
Sept '98
Jan '99
May '99
Sept '99
Jan '00
May '00
Sept '00
Jan '01
Percent
0
Jan '93
May '93
Sept '93
Jan '94
May '94
Sept '94
Jan '95
May '95
Sept '95
Jan '96
May '96
Sept '96
Jan '97
May '97
Sept '97
Jan '98
May '98
Sept '98
Jan '99
May '99
Sept '99
Jan '00
May '00
Sept '00
Jan '01
$/Head
14
48.0
46.0
44.0
42.0
40.0
38.0
36.0
34.0
32.0
30.0
Retailers Share of Beef's Retail Value
Month/Year
Month/Year
Total Producer Share for Beef
50.0
45.0
35
40.0
35.0
30.0
Month/Year
$180
12
Monthly Avg. Beef By-Product Values
11
10
$60
9
8
7
Month/Year
Calf & Feeder Cattle Prices Set Historical Records: All Classes Higher
by Chuck Lambert
January/February 2001
Summary
Prices for steer calves and feeder cattle averaged an all-time record $109.12/cwt. and $91.91/cwt.
respectively during 2000 while fed cattle prices averaged $69.65/cwt. -- the highest annual price in seven
years but less than the plus-$70/cwt. annual averages posted during 1988 through 1993. Monthly prices
for steer calves have ranged above $100/cwt. since November 1999. Prices for 650 lb. feeder steers
ranged from $89.50 to $94.50/cwt. during 2000 while fed cattle prices averaged a monthly high
$73.22/cwt. during April before declining seasonally to the mid-$60s/cwt. during August and September.
Fed cattle prices averaged $76.32/cwt during December 2000, the highest monthly price average since
June 1993. Higher fed cattle prices are primarily due to increased demand and strengthening boxed beef
prices, weather-compounded tightening supplies of market-ready cattle and increasing beef exports. The
recovering Asian market has resulted in improved by-product values and general improvement in export
markets. Higher fed cattle prices and relatively low feed grain prices resulted in record prices paid for
feeder cattle and calves.
Background
An inverse relationship normally exists between the price that feedlots pay for corn and the price
that feedlots pay for calves and feeder cattle. The 1995 corn crop totaled approximately 7.37 billion
bushels versus crops of more than 10 billion bushels in 1993 and 1994. As a direct result the prices for
feeder cattle and steer calves -- which had traded at a premium to fed cattle prior to October 1995 -- sold
for less than fed cattle prices during 1996. The August 2000 corn price of $1.53/bu. established the lowest
since September 1987 before increasing to $1.91/bu. in December. Prices for steer calves and feeder
cattle have increased faster than prices for fed cattle as corn prices remain relatively low. Increased fed
cattle prices since March 1999, low corn prices and tightening supplies have resulted in continued
increases in prices for calves and feeder cattle. During December 2000 calf prices were 8.4 percent higher
than in January 1993 while the price for corn was approximately 5.5 percent less than the January 1993
corn price.
Prices for all classes of cattle are greatly improved from the cyclical lows established during
1996, and prices for calves and feeder cattle set records during 2000. During March and April 1996, the
monthly average price for steer calves averaged less than $60/cwt. and feeder cattle prices averaged less
than $54/cwt. These prices were a major decline from prices for steer calves that ranged from $96.50/cwt.
in 1988 to $105.70/cwt. during 1991 and $103.15/cwt. during 1993. Fed cattle prices averaged
$78.32/cwt. during 1992 with a monthly high average of $82.32/cwt. during March 1993. During 1996
the fed cattle price averaged $65/cwt. with a monthly low average of $59.60 during April and May 1996.
Prices for feeder cattle and calves remain at record levels primarily due to higher fed cattle prices, lower
feed grain prices and declining feeder cattle supplies.
Key Points
The National Cattlemen’s Beef Association will continue to evaluate factors impacting prices and
price discovery. Continued efforts to market relatively large beef supplies -- including retail price
featuring and other initiatives to reduce the total cost of producing, processing and marketing beef -- and
growth in exports will be critical to maintaining a viable beef industry and increasing market share.
Monitoring and reporting feed grain crop conditions will help producers anticipate impacts on prices for
feeder cattle and calves.
Jan '93
May '93
Sept '93
Jan '94
May '94
Sept '94
Jan '95
May '95
Sept '95
Jan '96
May '96
Sept '96
Jan '97
May '97
Sept '97
Jan '98
May '98
Sept '98
Jan '99
May-99
Sept '99
Jan '00
May '00
Sept '00
$/Cwt.
Fed Cattle
Jan '93
May '93
Sept '93
Jan '94
May '94
Sept '94
Jan '95
May '95
Sept '95
Jan '96
May '96
Sept '96
Jan '97
May '97
Sept '97
Jan '98
May-98
Sept '98
Jan '99
May-99
Sept '99
Jan '00
May '00
Sept '00
Index: Jan '93 = Base
Corn Index
Feeder Cattle
Fed Cattle
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
$/Cwt.
120.00
Annual Average Cattle Prices: 1980-2000
110.00
100.00
90.00
80.00
70.00
60.00
50.00
40.00
Year
Str. Calves
Monthly Cattle Prices
115.00
105.00
95.00
85.00
75.00
65.00
55.00
45.00
Year
Feeder Steers
2.5
2.25
2
1.75
1.5
1.25
1
0.75
0.5
0.25
0
Index of Corn and Calf Prices
Year/Month
Calf Index
Str. Calves