Amount of Beef Exported Per Year What Does the Us Have an Absolute Advantage in

by Erin Borror, USMEF economist

Since the North American Gratuitous Merchandise Agreement (NAFTA) was implemented 20 years agone, many factors accept influenced agricultural trade between the U.s., Canada and Mexico. This article examines developments in the red meat trade within the North American market.

U.S. beef exports to Mexico grew fairly steadily after the passage of NAFTA, from less than $300 one thousand thousand to a 2008 peak of $1.4 billion – which they reached subsequently a quick post-BSE rebound. Because of the lingering impact of the global economic and financial crisis and diversification of U.S. exports as other markets recovered from BSE-related restrictions, exports have not recovered to 2008 levels. However, exports gained momentum in the second half of 2013 and Mexico remains the second-largest volume marketplace (behind Nihon) for U.Due south. beef. It ranks third in export value, behind Japan and Canada.

Drought has impacted the cattle herds in both Mexico and the The states, leading to liquidation and high cattle and beef prices. For this and other reasons, beef product and consumption have not increased significantly over the past 20 years. Comparing 2013 estimates with 1994 totals, U.S. beef production grew by 5 percent and total consumption by ane percentage. Over the same menstruation, Mexico'south beefiness production declined by 2 percent and consumption fell past 9 percent, based on USDA estimates. College beef prices accept caused Mexican consumers – similar many in the United states of america – to turn to less expensive poultry and pork products.

Mexico has historically been a meaning exporter of feeder cattle to the United States, where cattle feeders oft have the advantage of less expensive feedgrains, economies of scale and proximity to packing plants. This is especially true in the years of tight cattle supplies. Over the past 20 years, imports of Mexican feeder cattle accept not grown significantly due to a number of factors unrelated to NAFTA. In fact, the record yr for feeder cattle imports was 1995, with 1.65 million head. In 2012, imports approached that record at 1.four one thousand thousand head, as drought and high U.S. prices pulled cattle north. Imports in 2013 were down most 35 percentage as rainfall improved pastures in Mexico and ranchers began working to rebuild herds. The U.S. is a internet exporter of beefiness to Mexico, but is now a cyberspace importer when combining beef and live cattle from United mexican states. This trade arrears narrowed in 2013, withal, due to the decline in feeder cattle imports, a rebound in U.S. beef exports to Mexico and slower imports of Mexican beef (which had increased steadily since 2010).

Similarly, alive cattle imports from Canada accept not grown significantly over the by xx years. Imports peaked in 2002 at 1.69 million head, before the U.S. closed to Canadian live cattle due to BSE. Imports eventually rebounded to 1.6 million head in 2008, but have since ranged from 700,000 to one.1 1000000 head per year. Live cattle trade has been impacted by exchange rates, cost of gain and U.S. cattle prices, equally well as the country of origin labeling (Cool) regulations implemented in the summer of 2008.

On the beefiness side, U.South. exports to Canada were relatively steady from 1994 to 2003 at less than $400 million per year. Only post-obit the mail service-BSE resumption of merchandise, exports took off and volition probable set some other record in 2013 at approximately $1.two billion. The The states was even a internet exporter of beef to Canada for several months in 2012 and early 2013, only this was due in role to closed slaughter plants in Canada and a strong Canadian dollar. Of the iii NAFTA countries, Canada's beef production has increased the most over the by 20 years – climbing thirteen percent. Domestic beefiness consumption is upwardly 10 percent. Canada is besides a major net exporter, with exports accounting for virtually one-tertiary of beefiness production and 20 percent of cattle production.

Comparing 1994 results with 2013 estimates, U.Due south. beef exports to Mexico and Canada grew from $660 meg to more than $2 billion. Canada's exports to the U.S. and Mexico grew from $400 million to $975 million. Mexico's exports to the U.South. grew from $10 1000000 to $570 million. The United States is the largest market for both Canada and Mexico'south beefiness exports. While Japan reclaimed its position last year as the No. 1 destination for U.S. beef, Mexico and Canada have a solid hold on the No. 2 and No. three positions.

U.S. pork exports to Mexico and Canada have increased steadily over the past 20 years, from less than $190 meg in 1994 to more than $2 billion in 2013. It took a few years to gain momentum, but exports to Mexico took off in 2000 and approached $one.2 billion in 2013, marking six sequent years of record-breaking export values. Exports to Mexico take been fueled by consumption growth, which nearly doubled over the xx years. United mexican states's domestic production, which increased 41 per centum during the same menstruation, has not been able to keep pace with the booming need, and there is still room for growth in United mexican states's relatively low per capita pork consumption.

Mexico's pig producers have benefited from increased admission for U.South. corn, although duties on corn were phased out over a 15-yr flow nether NAFTA – much longer than most agronomical products. Mexico's pork exports to the U.S. accept grown from a minimal value in 1994 to about $25 meg. Mexico has recently benefited from growing pork exports to Nippon, additional past an Economical Partnership Agreement. Mexico'due south comparative reward in labor helps it produce loftier-value cuts demanded in markets similar Japan.

For Canada, exports to Mexico and the United States grew from less than $450 meg in 1994 to more than than $ane.17 billion in 2013. The U.S. is Canada's top pork export market, just while Canada's beef exports are primarily to the U.S., its pork exports are diversified and domestic production growth has been driven by export growth to Russian federation and key Asian markets. Canada exports about 68 percentage of its pork production, without accounting for live sus scrofa exports. Although the U.S. is a internet importer of pork from Canada, U.S. exports to Canada take been growing steadily. Exports to Canada set a record of $856 million in 2012, and fell just slightly short of that marking final year. This growth has been particularly impressive considering Canada's pork consumption has actually declined slightly over the past twenty years, while production grew by more than than 60 percent.

Over the past 20 years, U.South. pork production too increased dramatically – increasing well-nigh one-tertiary while consumption grew by simply 1 percent. So exports take conspicuously been the key to this production growth. Over the past 20 years, U.Due south. exports grew from merely 3 per centum of production to about 23 per centum today (including simply muscle cuts, not variety meat).

On the live hog side, the U.S. and Canadian industries became increasingly integrated every bit imports of Canadian hogs grew steadily from less than one million head in 1994 to 10 million head in 2007. This upward trend was interrupted past the implementation of COOL and other factors – including commutation rates and feed prices – and imports of live Canadian hogs have recently dropped to well-nigh five one thousand thousand head per yr.

Moving forward, the North American cerise meat industries should continue to benefit from integration, as capitalizing on each countries' comparative advantages can help united states meet the growing global demand for meat. However, concerns remain with the pending ruling of the WTO compliance panel on the enhanced U.Southward. Cool rule, and there is still piece of work to be washed to fully reopen Mexico'south market place to U.Southward. beef. Information technology will also take time to rebuild the drought-depleted North American cattle herd.

Mexico and Canada joining the Trans-Pacific Partnership (TPP) negotiations could also eventually change the dynamics of North American meat trade. Currently the U.S. captures a dominant share of both Canada'due south and Mexico's imported beef and pork. Through TPP, Commonwealth of australia and New Zealand could also gain preferential access for beefiness exports and we can wait more competition, especially in United mexican states. However, the U.Due south. industry's shut proximity and well-established market presence will aid united states of america go on a solid foothold in these critical markets for U.Southward. cherry meat.

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Source: https://www.usmef.org/nafta-turns-20-a-closer-look-at-north-american-red-meat-trade/

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