WASHINGTON – For 2011, US beef imports are forecast to total 2.18 billion lbs., about 5 percent below year-earlier levels, according to the June 15 Livestock, Dairy and Poultry Outlook from the US Department of Agriculture’s Economic Research Service. Second-quarter imports are forecast at 570 million lbs., or 17 percent below the second quarter of last year.

US beef imports have been impeded by the declining dollar value. Since May 2010, the US dollar has been on a marked downtrend. But last month it hit a new low of .91 AUD/USD against the Australian dollar, and in June it has thus far posted a further low against the New Zealand dollar of 1.22 NZD/USD.

Through April, beef imports from Australia and New Zealand were 24 and 7 percent, respectively, below 2010 levels. Total third-quarter imports are forecast at 595 million lbs., or nearly even with year-earlier levels, and fourth-quarter imports are forecast to be 27 percent higher. Beef imports are expected to increase next year to 2.48 billion lbs. — or 13 percent higher year-over-year — largely as more product is shipped from Oceania.

Drought conditions in Mexico have increased the incentive for many producers to export cattle to the US. The principal forage-producing states of Mexico are facing extreme drought conditions that could endanger animals, particularly if critical rainfall is not received in June and July—the rainy season for major cattle and forage-producing states in Mexico.

Given feeder cattle demand in the US, these lightweight cattle have largely been placed directly into feedlots during the past few months--atypically, as they normally would have grazed forage in the US before being placed. However, large portions of Texas and New Mexico are also experiencing drought conditions. Monthly cattle imports from Mexico through April were 28 percent higher than year-earlier levels, according to US Census data.

These higher imports have been maintained in recent weeks, as weekly AMS data reports through the first week of June also show cattle imports from Mexico 27 percent higher year-over-year. Weather conditions in Mexico in the summer months will determine the degree of seasonal spike in cattle imports this fall.

Monthly Canadian cattle imports through April were 38 percent below year-earlier levels. Weekly AMS reports show year-over-year Canadian cattle imports declining further into June—nearly 40 percent lower. Thus far in the year, the US-Canadian slaughter cattle price differential has remained well below levels posted in the last three years. In April, this differential only began to cross into the range posted in 2009; since May, it has averaged $3.80/cwt lower than 2010 levels.