There are some head winds for beef exports in the short term for the U.S. cattle industry. Kansas State University Extension Livestock Market Economist Dr. Glynn Tonsor said several factors popped up in the latest World Agricultural Supply and Demand Estimate report. The WASDE report includes export projections for the year. Tonsor said the report continues to make revisions downward for U.S. meat exports in nearly every category.
The U.S. continues to find new cases of H5N2 Avian Influenza. Tonsor said with a growing number of countries or regions making ban announcements, the U.S. will export less broiler and turkey meat in 2015. The April WASDE report forecast has U.S. turkey/poultry exports down about six percent, which Tonsor calls a notable reduction because of the amount of poultry exported by the U.S.
The U.S. continues to deal with ongoing exchange rate problems with the stronger U.S. dollar and companies continue to recover from the west coast labor dispute.
The Australian drought has put more Australian beef on the global market. Tonor said that has created more competition for the U.S. cattle producer. With the stronger U.S. dollar that has not been favorable for American beef exports. There is also the ongoing Country of Origin Labeling (COOL) dilemma. He said all of those factors are bearish for the short term for U.S. beef exports because these factors are making it harder to export American beef. In looking at the long term outlook, Tonsor said he remains bullish on U.S. beef exports.
The U.S. hasn’t reached amble supply levels, but meat supplies will be less tight going forward. Tonsor said poultry and pork production in the U.S. is increasing. While total meat production is going up, he said that is being muted by the lack of growth of U.S. beef production.
“Yes, that is possible that we are walking into more of an environment where there is less supply side support and we are more and more reliant on demand strength.” Tonsor said.
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