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International trade a buffer for cattle market

A livestock marketing specialist calls international trade a buffer as the U.S. cattle herd expands.

Oklahoma State University’s Derrell Peel says while beef import and export volume comprise just 10 percent of total market-share, it plays a critical role.

“When we didn’t have enough beef and we had record-high beef prices, it tends to attract beef from other places.  So imports increased pretty dramatically in 2014 and 2015.  And by the same token, exports get choked off a little bit.  There’s not as much beef to go around, and one of the places that gets rationed is in exports.”

He tells Brownfield the U.S. cattle industry is in the midst of a transition with increasing supplies and falling prices.

“We see the trade do exactly the opposite in terms of having that buffer effect, in that imports are falling (and) exports are beginning to grow.  And all of those are things that basically stabilize the market and can play a pretty important role at the margin as we go forward.”

Peel says he believes the U.S. is still relatively early in transitioning to larger supplies, and beef exports should improve while imports continue to moderate.

The USDA reports beef exports are up three percent year over year and imports are down 12 percent.