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CME: Beef Imports Up in 2018 Despite Reduction in Australian Shipments

10 October 2018

US - Steiner Consulting Group, DLR Division, Inc. reports that the last USDA WASDE report pegged total US beef imports for 2018 at 3.037 billion pounds, 44 million pounds or 1.5 per cent higher than a year ago.

Given the rate of imports through the end of September, it is possible we may see a modest upward revision in those estimates in the next report (11 October). The increase will likely be a non-factor in terms of overall domestic consumption, however.

Beef imports have increased this year despite a reduction in Australian beef shipments to the US. Imports from NAFTA countries have been higher thanks to a strong US dollar and strong beef demand in the US.

New Zealand beef imports have also increased compared to last year as poor dairy margins have bolstered slaughter numbers there. New Zealand slaughter seasonally increases at this time of year but the rate of slaughter at the start of the new season can be highly variable depending on spring weather conditions (Southern Hemisphere).

There has also been a notable increase in imports from Central America, with Nicaragua sending almost 20 per cent more beef to the US so far this year. Still, it is important to put those numbers in perspective.

The increase in Nicaraguan imports means an additional 6,700 MT. Converted on a carcass weight basis this would be approximately 20 million pounds when US domestic beef production last week alone was over 531 million pounds.

The increase in imports from Central America has helped offset lower imports from Uruguay and other markets. Brazil has been sending some cooked beef into the US but at this point it is not cleared to ship fresh/frozen product.

It is unclear when fresh/frozen beef imports from Brazil will resume but we think it is unlikely to happen until USDA conducts another audit and we have no idea when that may happen. Almost half of all Brazilian beef exports are currently going to China and Hong Kong so resumption of beef exports to the US, while desirable, is not as pressing an issue as it was three years ago.

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