World Cattle News:

[Mustang Sally Farm]

Wednesday, January 25, 2012
Australian Beef Exports to Russia Down

AUSTRALIA and RUSSIA - Australian beef exports to Russia in 2011 declined five per cent year-on-year, to 54,088 tonnes swt, reports Meat and Livestock Australia (MLA).


MLA states that despite a relatively slow finish to the year, with December exports back 66 per cent year-on-year, total exports for the year were still historically high, placing Russia as Australia’s fourth largest beef export market in 2011.

Manufacturing beef remained the dominant beef cut to Russia in 2011, totalling 20,490 tonnes swt - up 36 per cent from 2010. Russian demand for Australian manufacturing beef was consolidated in 2011, as domestic beef consumption increased and imports from traditional suppliers, such as Brazil, remained very tight. Brazilian beef exports to Russia decreased 20 per cent during 2011, to 228,822 tonnes swt.

Frozen beef accounted for 98 per cent of shipments in 2011, with the majority of product used for manufacturing purposes. Chilled product, largely into the food service sector, decreased six per cent year-on-year, to 1,014 tonnes swt.

[Mustang Sally Farm]

Thursday, January 26, 2012
Indonesian 1st Quarter Cattle Permits Used Up
AUSTRALIA - A Northern Territory livestock agent says permits to send live cattle to Indonesia for the first quarter of the year been used up, according to ABC Rural.


Indonesia slashed the number of export permits from 520,000 in last year to 283,000 this year.

It says it wants to become self sufficient with beef production.

ABCRural reports that Katherine Elders branch manager, Warrick Barrett, says there'll be few cattle bought in the Top End for another two months.

"Most of the exporters at this stage have bought cattle to fulfil their permit issue for the first quarter, so it's meant that a lot of exporters are now probably out of the market until April," he says.

[Mustang Sally Farm]

Mexico's Emerging Role as an Exporter of Beef to the US
US beef imports from Mexico have at least doubled in each of the last 2 years, continuing an upward trend that began in 2003, writes Rachel J. Johnson and Amy D. Hagerman for the USDA, Economic Research Service.

 

The impetus for the increased imports is beef from Mexican Tipo Inspección Federal (TIF) plants and increased production of grain-fed beef, the quality and type of beef US consumers prefer. The increase in coarse grain domestic feed use in Mexico, in addition to increased exports of US feed and distillers’ grains, is evidence of the shift toward fed beef in Mexico.

Beef imports from Mexico in 2010 totaled 107 million pounds, making Mexico the fifth largest exporter of beef to the United States. Through November 2011, imports of beef from Mexico increased by 46 per cent over the same period in 2010. The majority of beef imported by the United States from all sources is processing beef, which is mixed with trim for grinding in the United States. Over the last 10 years, on average over 86 per cent of beef imports to the United States have been boneless, fresh, or frozen meat cuts, much of which is used in processing. This category of imports has increased from Mexico—by nearly 88 per cent in 2010—but is paralleled by increasing imports of bone-in beef cuts as well. Of the bone-in beef cuts imported to the United States in 2010, which excluded processed fresh beef, nearly 42 per cent were supplied by Mexico. However, it is notable that beef imports from Mexico still serve a very small portion of overall US beef consumption.

There are two reasons for the increasing exports of Mexican beef to the United States: (1) an increase in the number of TIF plants in Mexico (federally inspected slaughter plants meeting standards similar to those in the United States), and (2) an increase in production of grain-fed beef in Mexico, the quality of beef that most often meets the tastes and preferences of US consumers. For meat to be moved across State borders in Mexico or to be exported to the United States, it must be inspected at the Federal level. When the Mexican inspection program began 60 years ago, 15 TIF establishments were operational; that number has grown to 365 TIF plants in 27 States in Mexico, rising almost exponentially in the past few years. In 2010, 75 TIF slaughter establishments were certified, including some preexisting facilities that were converted to adhere to TIF standards. These efforts are being driven by initiatives in Mexico to produce higher quality meat products, become more competitive in the global marketplace, and capture gains from exports. The Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA) announced this year that another 100 active slaughter establishments will become certified TIF plants (http://www.sagarpa.gob.mx/saladeprensa/boletines2/Paginas/2011B600.aspx). Through October 2011, Mexico exported beef products valued at $452 million, with 60 per cent of that earned from beef sent to the United States.


The increase in TIF plants has resulted in an increase in boxed beef and higher quality, exportable beef cuts. Since TIF plant production of boxed beef is increasing as it replaces traditional hot-carcass (with viscera) marketing on a value basis, not only is there a greater supply of the primal and sub-primal cuts that are in greater demand by US consumers compared with Mexican consumers— such as tenderloin (filete), loin (lomo), sirloin (aguayón), ribs (costillas), and short ribs (agujas cortas), for example—but there is more trim available for processing. Trim is also in greater demand in the United States relative to the Mexican market, where beef from culled animals is not ground but is consumed as muscle cuts. Mexican consumers tend to prefer the leaner cuts of beef, such as the chuck and round, with little or no marbling, since the traditional grass-fed beef production system in Mexico produces leaner beef.

Although Mexican consumers still prefer traditional cuts and processing methods, changing preferences in certain areas have resulted in growing demand in Mexico for the flavor and other attributes of grain-fed beef. As a result, increasing numbers of cattle are being fed through semi-intensive and intensive feedlot operations (table 1). One limitation to Mexico’s beef production is forage availability, but with greater numbers of cattle finished in the feedlot rather than on pastures, more forage resources are being released for cow-calf production This, in turn, will allow for greater total beef production in Mexico. Grain-fed beef is still produced in a somewhat less intensive system compared with US feedlot production—feeding periods are shorter and carcasses are considerably leaner, with little or no marbling—but this is still a significant shift from the traditionally grass-fed beef production systems where animals have yellow fat and are often 3-4 years old at slaughter.

In addition, feed consumption of coarse grains in Mexico has trended up over the last couple of decades, supporting the expanding Mexican beef production and feedlot industry (fig. 2). The increase in dried distillers’ grains (DDGs) exported to Mexico in recent years (fig. 3) has also supported the increase in Mexican cattle feeding.

An increase in TIF processing capacity, changes in beef demand in Mexico and the increase in Mexican grain-fed cattle for slaughter are resulting in a greater supply of beef available and of interest to the US import market. The Mexican beef industry continues to improve infrastructure and marketing channels but still faces challenges in competing for inputs, feed sources, and forage and land availability from domestic crop production. Mexico has the potential to keep growing as a supplier of beef to the United States as the changes in demand, cattle feeding, and slaughter in recent years are sustained.

 

[Mustang Sally Farm]

Monday, January 30, 2012
Outlook Bleak for 2012 Live Cattle Exports
ANALYSIS - Reduced permits to Indonesia, rising beef prices, cattle shorts and an expanding domestic feedlot industry don't provide a rosy outlook for 2012 Australian live cattle exports, writes Charlotte Johnston, editor.

Last year, Indonesia announced that they would cut 2012 Australian cattle permits, from 520,000 head in 2011 to 283,000 head in 2012, in a bid to increase the country's self-sufficiency.

Indonesia will now revise their import permits based on the domestic price of beef in Indonesia. If domestic prices rise sharply there is capacity for their trade ministry to adjust import permits to allow more cattle and beef to enter their market from countries like Australia.

Disappointingly for the industry, only 60,000 permits were issued for the first quarter 2012 and there are reports that these permits have already being used up.

With this in mind, MLA predicts that live cattle exports will fall by 31 per cent to Indonesia in 2012, and be almost 500,000 head less than the record year in 2009.

It is expected that total live cattle exports will fall by 16 per cent, taking into account the factors mentioned above.

Despite a less than favourable outlook, many in the industry are still hopeful that Indonesia may raise the number of permits, however for some this does seem a bit too hopeful.

Although season conditions, feasibility of exports to price sensitive markets and competition from slaughter markets for suitable young cattle all will play a part in the success of 2012 live cattle exports, the access to the Indonesia market is by the far the most important.

[Mustang Sally Farm]

Tuesday, January 31, 2012

Australia Held Half of Korean Beef Imports

AUSTRALIA and KOREA - Korea imported 152,721 tonnes swt of Australian beef in 2011, giving Australian beef a 50 per cent market share of Korea’s imported beef market (KITA), reports Meat and Livestock Australia (MLA).

MLA states that total Korean beef imports for 2011 reached 307,613 tonnes swt - an increase of 18 per cent year-on-year. Beef imports in Korea for 2011 were the third largest on record and only slightly behind the peak of 325,866 tonnes swt in 2003. Korea’s growth in imported volumes for 2011 can be attributed to several factors, including the impact of foot-and-mouth disease (FMD) on local beef consumption and the overall growth in meat demand.

The US share of the Korean import market increased from 32 per cent in 2010, to 37 per cent in 2011, totaling 115,334 tonnes swt - supplying 41 per cent of total frozen and 21 per cent of chilled beef imports.

Frozen beef made up 92 per cent of total Korean imports of US beef. Korean imports of New Zealand beef remained largely unchanged, totalling 34,323 tonnes swt, making up 11 per cent market share in 2011, while Mexican beef made up two per cent of total Korean beef imports.

[Mustang Sally Farm]

Thursday, February 02, 2012
Russia Remains World's Largest Beef Importer

RUSSIA - According to the United States Department of Agriculture (USDA), Russia is forecast to remain in its new found position as the world’s leading beef importer in 2012, with volumes expected to increase one per cent, to 1.06 million tonnes, reports Meat and Livestock Australia (MLA).
 

MLA reports that the Tariff Rate Quota (TRQ) volume remains unchanged in 2012, with a significant amount again expected to be imported above the quota.

Russia continues to have restrictions in place on certain Brazilian beef facilities, significantly reducing imports from Brazil. An embargo placed on selected Brazilian facilities in May 2011, meant that by the end of November only 84 plants out of the original 249 licensed by Rosselkhoznadzor could sell meat without restrictions to Russia. This had a significant impact on Brazilian exports to Russia throughout 2011, with exports falling from a high of 33,854 tonnes swt in May to a low 11,051 tonnes swt in September.

Alternative suppliers to Russia are expected to benefit from the continued restrictions on Brazilian beef and the redirection of Brazilian product to other markets, largely in the Middle East and in their own domestic market. Australia exported 54,088 tonnes to Russia in 2011, making Russia Australia’s fourth largest export market behind Japan (342,188 tonnes swt), the US (167,820 tonnes swt), and Korea (146 356 tonnes swt).

[Mustang Sally Farm]

Friday, February 03, 2012
Spanish Beef Producers Focus on Exports
SPAIN - "Exports as the Strategy for 2012": this was the title of the recent Asoprovac (The National Beef Cattle Finishers´ Association) seminar in Toledo, attended by over 300 feedlot operators and traders from all over Spain, according to Cecilia Ruiz, the Madrid Office Manager of Bord Bia Irish Food Board.


This is a new development as Spain has traditionally been a net livestock importer.

Last year was a relatively good year for both cattle finishers and the beef industry.

Cattle prices were strong and cereal prices stabilised. In addition, the is not focusing as strongly on the domestic market - with a per capita consumption of 7kg and demanding specs - they are expectantly looking towards new export outlets both for beef and live cattle.

The EU - 27 has become a net beef exporter and Spain is following the same path for the first time. Cattle supplies were almost two per cent higher up to the end of September while an 11 per cent increase in live cattle imports was more than matched by a rise of 19 per cent in live exports (or 38 per cent in the case of >300kg animals). Despite a drop of nine per cent in beef imports, total beef exports were 10 per cent higher in the first nine months of 2011 at 84,000 tonnes.

In this different context, Irish beef exports to Spain have behaved remarkably well with an estimated exports of over 16,000 tonnes cwe in 2011, leaving Ireland as the third main supplier of beef to Spain.

Bord Bia continues to concentrate its efforts in consolidating Irish beef's presence in the Spanish multiple retail scene and in positioning it as premium offering.

[Mustang Sally Farm]

Monday, February 06, 2012
Nestle's Heifer Project Gathers Momemtum
ZIMBABWE - Nestle Zimbabwe's project to boost milk production is now in full swing with the company distributing 100 imported heifers to new farmers joining the programme.


TheHerald reports that the dairy expansion programme commenced late last year with Nestle importing 200 dairy heifers from South Africa of which 100 were distributed to contract dairy farmers supplying milk to the company's factory in Southerton.

At an event held on Wednesday, farmers were presented with the balance of the 200 imported heifers.

The new farmers entering the Nestle dairy scheme include Kunaka Estates of Matepatepa, Panhowe Farm from Mazowe, Pades Wood Farm in Headlands and Nyadire Mission Primary School.

The 200 imported heifers are the first batch of 2 000 cows that the company will import under a US$14 million dairy revival project over seven years. In addition, the company also distributed 146 milking cows to its contracted dairy farmers.

Nestle country director Mr Kumbirai Katsande said the company was in the process of engaging the Government on the rollout of the company's small-scale dairy development programme across the country.

The small-scale initiative is in addition to the contract programme.

"Nestle will be rolling out its small-scale dairy development programme to other provinces during the course of the year. Discussions with Governor (Aneas Chigwedere of Mashonaland East and Governor (Chris) Mushohwe of Manicaland have already started and identification of district centres suitable for small-scale dairy development is in progress.

"The aim of this project is to enhance the livelihoods of small-scale farmers by providing them with food security and a sustainable way to earn their living," he said, according to The Herald.

The programmes will provide an impetus to the growth of Zimbabwe's dairy industry.

National milk production in the country had declined from a high of 260 million litres per year in 1996 to the current level of 50 million litres. At its peak, the country had over 200,000 dairy cows compared to the current herd of less than 40,000 cows.

[Mustang Sally Farm]

Wednesday, February 08, 2012

US Cattle Slaughter Down in Q4 of 2011

GLOBAL - US cattle slaughter during the final quarter of 2011 was down 4.2 percent from the previous quarter.
 

According to the USDA's National Agricultural Statistics Service (NASS), the number of cattle and calves in the US on 1 January was 90.77 million head. This was 2.1 per cent less than a year ago and was the lowest 1 January inventory since 1952.

According to International Meat Review prepared by the USDA's Agricultural Marketing Service (AMS), the number of cows and heifers that have calved was down 2.2 per cent from a year ago. Of the total cows and heifers, the number of beef cows was 3.1 per cent lower than a year ago.

The number of heifers for beef cow replacement was up 1.4 per cent over last year. The number of steers weighing more than 500 pounds fell 2.0 per cent from a year ago.

The number of cattle and calves on feed for slaughter in all feedlots on 1 January was a little higher than a year ago. During 2011, the calf crop was less than 2010 and the smallest since 1950.

Texas had the largest concentration of cattle with 13.1 per cent of the total inventory. However, due to the drought, this was less than a year ago.

[Mustang Sally Farm]

Friday, February 10, 2012
Live Exports Fall in 2011
AUSTRALIA - In a difficult year for the Australian live export industry, export volumes and values fell for live cattle from 2010 levels, reports Meat and Livestock Australia.

Live cattle exports dropped 21 per cent year-on-year to total 694,429 head for 2011 – valued at $629 million (Australian Bureau of Statistics). Indonesia remained the largest export market, despite shipments falling 21 per cent below the previous year, at 413,359 head. It also retained its 60 per cent market share from 2010, while Turkey (56,557 head) and Israel (53,925 head) each recorded a market share of eight per cent.

[Mustang Sally Farm]

Monday, February 13, 2012
Madagascar Resumes Cattle Exports
MADAGASCAR - Madagascar can now resume cattle exports after the international embargo imposed on the nation in the 1990s was lifted.


“The first batch of 120 steers heading to the Comoros will leave the port of Mahajanga, north western Madagascar, next Saturday,” said the Farming minister, Ihanta Randriamandranto, reports DailyNation.

Local traders also expect to meet orders received from the neighbouring island of Mauritius soon.

Strict veterinary conditions must be respected, according to the minister. The annual quota for the island is 50,000 cattle.

Export is allowed only for steers weighing more than 300 kilogrammes. Calves and cows are banned.

A government source said the national herd stands at approximately nine million. With the high consumption of beef in the country, the national herd is under threat.

Official records show Madagascar slaughters an annual average of 450,000 cattle.

With its two million inhabitants, the capital city Antananarivo alone consumes at least 250 cattle a day.

[Mustang Sally Farm]

Tuesday, February 14, 2012
International Review Forecasts Firm Beef Prices
GLOBAL - Global prices for both beef and sheep are likely to remain firm in 2012, helped by demand from the emerging economies. This is the encouraging message from the latest International Meat Market Review, published by AHDB’s market intelligence division on behalf of EBLEX and BPEX in the UK.


“Global beef prices continued to increase in 2011 with prices in major producing countries all ahead of last year. It is likely that firm prices will prevail through 2012,” said AHDB senior analyst Debbie Butcher.

“Full year figures are expected to show that beef and veal production fell in 2011, but we should see some selected modest recovery in 2012.

“In terms of lamb, with tight supplies set against rising demand in emerging economies likely to continue, prices should remain firm in 2012, if not quite reaching the heights recorded at some points in 2011.

“As a result of this optimistic outlook, rebuilding of the global flock is expected to become more apparent.”

[Mustang Sally Farm]

Wednesday, February 15, 2012
Brazil Increases Middle Eastern Dairy Exports
BRAZIL - Sales of dairy products to the Middle East grew 34 per cent in January as against the same period in 2011, with a value of US$ 986,000. Exports from Brazil to the rest of the world remained stable in the period.


Brazil exported US$ 986,000 in dairy products to the Arab world in the first month of this year, according to figures disclosed by the Ministry of Development, Industry and Foreign Trade. There was 34 per cent growth over the same period last year, when sales totalled US$ 737,800.

The value represented 20 per cent of the total Brazil exported in milk and dairy products in the month, which totalled approximately US$ 5 million. The volume was stable as against January 2011. But the country imported US$ 75.2 million in sector products, which generated a deficit of US$ 70.2 million in the trade balance in the area. Imports rose, according to Ministry figures disclosed by consultancy company Scot Consultoria, 46.2 per cent over January 2011.

To the Arab market, Brazil exported items like cream and butter oil. The buyers were the United Arab Emirates, in first place, with US$ 287,600, Algeria, in second, with US$ 209,000, Saudi Arabia, with US$ 127,900, in third place, Oman, with US$ 112,000, in fourth, and Kuwait, with US$ 87,000, in fifth place.

Last year, milk collection in the main Brazilian producer states dropped 2.2 per cent over the previous year, according to a study disclosed by Centre for Studies in Applied Economics (Cepea). The reduction meant 500 million less litres of milk. Producers were demotivated due to the high production cost.

[Mustang Sally Farm]

Wednesday, February 15, 2012

Allendale: Cattle is "Trade of the Year"

ANALYSIS - Rich Nelson, Allendale, Inc. director of research, said the US cattle market is "the trade of the year" and is bullish beef due to cattle liquidation and production issues, reports Sarah Mikesell, TheMeatSite senior editor.


 

"It is not grains, as far as a high confidence trade, it's in livestock, because you don't have to guess yields. This is a situation we already have proof is developing. And the market hasn't fully priced it in yet," said Rich Nelson, in late January at the Allendale Ag Leaders Outlook Conference.
 
Worst Liquidation Since the '80s

As a percentage of the total cow herd, slaughter rate reached 12.5 per cent in 2011. The cattle industry experienced the worst liquidation in 2011 that the US has seen since 1985-1986.



Rich Nelson spoke to farmers in late January at the Allendale Ag Leaders Outlook Conference in Illinois, USA.

"Beef has actually been liquidating since 2006," he said. "We have a serious loss in our beef production base. As a total cow herd, down 2.5 per cent may not sound like much, but it really is for the US cattle industry."
 
US Production Issues

The US has some issues on the production side that have caused this dramatic tighten of the cattle supply - the first being drought in US cattle areas.
 
"Five years out of the past six or seven years have been drought years in the cattle regions," he said. "This is a tough problem on the beef side. Even though consumers are asking for a little bit less beef each year, we have a serious problem in production."

 Second, hay production acreage has seen a significant shift over to grain since 2008. From 2005 to 2010, the US lost six million acres of harvestable hay ground out of just over 60 million acres, so 10 per cent of hay ground was lost with the highest loss coming just last year.
 


"We lost four million acres going to grain in 2011," Nelson said. "How's that set us up for production if you're going to expand? There's no way you're going to get that hay ground back - not with grain prices where they're currently at."

 For 2012, Nelson expects to see another million acre loss of hay ground.

A few positives on the production side include lower grain prices for 2012 and more widespread use of distiller's dried grains with solubles (DDGS) for feed.

"I'm not going to lay out the bearish situation that I normally would for cattle feeding," Nelson said. "It's not going to be as bad as you would assume with a supply crunch."
 
Expansion Timeline



"When you decide to expand in the beef industry, you hold young female heifers back in year one. You breed them in year two. They become born calves in year three," Nelson noted. "At a minimum, you have a three-year lag between the decision to expand, and when that expansion actually hits the market."

 So if expansion starts right now, there will still be lower beef production in 2012. It's also guaranteed lower 2013. And it's lower again in 2014. At a minimum, the industry won't see extra beef until 2015. So expect to see year-over-year declines in beef production played out.

 "Last year at this conference, we were moderately bullish for 2011, but said the real issue was 2012 and beyond when prices would tighten," Nelson said. "Even though it sounded outlandish, it surpassed what we expected at the time - this massive liquidation and drop in beef production."
 
Cattle Supply Deficit

In July, the industry pushed a lot of young 300 to 400 pound calves into the feedlot, giving the US higher cattle on feed right now. However, once the market works through those cattle, Nelson said the industry has decimated the available calf-feeder supply for placements, having placed an extra 4 per cent in this time, when there was actually fewer to place.

"There will be months in the next six months with as much as a 10 per cent drop in placements on a month-to-month basis," he said. "While we do have beef production, it's supposed to be a little higher right now. If you break down the current slaughter of cattle, it's actually extra cows slaughtered. If you look at actual feedlot-based slaughtered steers and heifers, they're down 2 to 4 per cent. The total slaughters may be even or a little less than last year because we've got a bunch of cows. The actual feedlot-style beef, which is what the packers are paying for, is actually down."



 Nelson said the continued losses in placements will set the US up for a big deficit in meat production, hitting the packing plant in the second half of this year. Beef production numbers may not be tight yet, but for the second half of the year, this developing problem will show up in prices. And there's evidence right now at the sale barn.

 "We have absolute proof that this available cattle and feeders supply issue is going on right now," he said. "In a few months, it's going to hit the fat cattle market and last through the remainder of 2012. This is significant for the cattle industry. Plus, it's even worse than we thought it would be."

 Looking forward to 2013 and 2014, it's the same situation - expect higher prices based on the live animal, which will not circulate wholly into the wholesale beef end - because this is a supply crunch.

"This is not a demand hole, where wholesale beef is leading; this is a supply crunch with cash cattle leading," he said. "This is going to stick with us for the next two years."
 
Sarah Mikesell, Senior Editor

[Mustang Sally Farm]

Monday, February 20, 2012
Uruguayan Beef in Big Demand
URUGUAY - Three countries of the former Soviet Union, Moldova, Georgia and Tajikistan, are interested in buying beef from Uruguay, as expressed by representatives of these markets to members of the Uruguayan delegation participating in the Fair Prodexpo in Russia.


The vice president of the National Meat Institute (INAC), Fernando Perez Abella, told The Observer that health conditions must first be met by Uruguay.

Buyers from the three countries expressed interest in principle cuts but have said that medical limitations need to be addressed in the boned meat business, said Mr Perez Abella.

The fair showed that there is interest in Uruguayan beef but it faces price competition with Paraguay.

Russia buys meat from Paraguay, which reported two outbreaks of FMD, the last on 2 January.