Growth of Live Cattle Exports

by Tony Clayton, President, Clayton Agri-Marketing, Inc.; President, Livestock Exporters Association of the USA

Summary
For years the breeders of both beef and dairy cattle have known U.S. livestock genetics are a value-added product.  Now our commercial beef and dairy operations find they have competition from the international market place that are importing live cattle from the United States in record numbers.

As the U.S. cattle industry recovered from the 2003 detection of BSE, many countries have reopened their market not only to U.S. beef products, but also to U.S. livestock genetics.  The U.S. livestock industry has been assisted by the misfortune of some of our competitors that have suffered outbreaks of disease and have been eliminated from exporting to some of our new markets.

  • Detection of Foot and Mouth Disease in the United Kingdom (2001 and 2007)
  • More detection of BSE in European countries (1986 to present)
  • The detection and spread of Schmallenberg Virus in Europe (2011 to present)

Since the United States has been able to maintain a healthy cattle industry, we have become a large supplier of live cattle to countries such as Egypt, Jordan, Kazakhstan, Mexico, Turkey, Russia and others as they put the BSE politics aside and adapt to the mentality of “you have it and we need it.”

Discussion
The demand for live cattle is also being driven by the continued population growth around the world and the demand for food for an estimated 9 billion people that will inhabit the earth by the year 2050.  Our industry will also feel the impact of urbanization, and it is estimated by the year 2015 that 48 percent of the world’s population will live in urban areas.  As our international consumer has migrated to the urban lifestyle they finds themselves with more disposable income, which causes them to eat better thus driving the demand for animal protein.

Our beef and cattle industry still find themselves on the outside looking in to the Chinese market and many of our agricultural products are still being held hostage over the demands of the Chinese to have access to the U.S. market for their chicken.  Since U.S. cattle have been banned from China since the detection of BSE in the United States in 2003, our misfortune has put millions of dollars into the cattle industries of Australia, New Zealand and Uruguay. Recently China has agreed in principle to import as many as 500,000 head from Romania.  The Chinese cattle producer really wants to import U.S. cattle genetics, but it will still be some time before the Chinese Ministry of Agriculture (MOA) will give the approval to the Chinese General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) to negotiate a health protocol with the USDA-Animal Plant Health Inspection Service (USDA/APHIS) that will allow U.S. cattle to be imported.  The Chinese are finding out even countries like Australia can have lower supplies of cattle, and the health and blood testing of countries like Uruguay may not meet their import requirements. 

It is difficult to believe countries like Romania will have proven genetics to keep the Chinese cattle industry efficient enough to feed a growing population, which over time may cause a stronger demand for beef.  How long they can dodge the issue of trade with the U.S. cattle industry remains to be seen.

Other countries like Russia and Kazakhstan have imported thousands of head of cattle since 2009. Russia alone has imported more than 190,000 head since 2009 and Kazakhstan is nearing 11,000 head. Both countries are guilty of importing more cattle than management can handle.  Some U.S. breeders have been able to develop joint ventures and partnerships in both countries and supply “boots on the ground” practices and technology to partners in both countries, but most have been frustrated by the step back in time with facilities and lack of trained personnel available to establish quality cattle operations.

Closer to home, there is a real expansion of live cattle being exported to Mexico in both the dairy and beef cattle industry.  Mexico has felt some of the same pains we have experienced in the United States with years of drought and high feed prices.  Last year, the Mexican government established a repopulation program for beef cattle in certain states of Mexico with government financial assistance. This program, along with lower feed prices and increased milk prices, will have an impact on the number of cattle exported to Mexico.  The Mexican feeder cattle producers that export to the United States are enjoying our record prices as well.  Mexico is even dabbling in the export market themselves with export shipments of feeder cattle to the country of Turkey.

Where are the U.S. cattle being exported to? Here is a breakdown of some of the leading markets from 2009-2013.

Country

Cattle Imported from the United States

Canada

253,099 head

Russia

190,814 head

Turkey

127,036 head

Kazakhstan

10,078 head

Egypt

4,527 head

Jordan

3,527 head

Angola

2,928 head

Panama

1,465 head

Oman

685 head

In November 2013, USDA/APHIS reached an agreement for the health protocol for cattle to be exported from the United States to Ukraine after many years of negotiation.  Ukraine could be a bread basket not only for Eastern Europe, but also Russia as well.  Some U.S. producers and companies may take a step back and rethink joint venture projects in both countries. 

Conclusions
Some international leaders have learned the hard way that hungry people can be dangerous people.  Once people quit throwing rocks and continue demonstrating success in places like Egypt, Libya, Ukraine and Venezuela, more markets will open to U.S. cattle. In the past year alone, new markets have opened in Iraq, Jordan, Ukraine and the next one will be Pakistan.

In 2012 U.S. livestock exports were nearly a $1 billion dollar industry and it has taken livestock exporting from a hobby industry to a real industry of creating thousands of jobs in the U.S. economy not only to the breeder’s day to day operation, but also to veterinarians, testing labs, truckers, feed suppliers, exporters and others in the export process.  The USDA states that for every billion dollars of agricultural goods that are exported, more than 8,400 jobs are created.  The U.S. sector of value-added livestock genetics finally has a place at the world business table.

Additional Resources 

http://www.aphis.usda.gov/regulations/vs/iregs/animals/

http://www.livestockexporters-usa.com/

http://www.uslge.org

http://www.fas.usda.gov/data

http://www.defra.gov.uk/animal-diseases/a-z/schmallenberg-virus/

http://en.wikipedia.org/wiki/Schmallenberg_virus

Tags: Beef Issues Quarterly, Spring 2014, Trends Analyses

April 12, 2014