As that supply of feeders from south of the border dwindles, it puts the crunch on cattle feeders from both an availability and price perspective.
The flow of cattle from Mexico is a key component of the overall supply for the U.S. cattle marketing system. Ongoing feeder cattle supply decline within the U.S. has been partially offset by increasing imports from Mexico. The need to maintain feedyard occupancy levels has generated significant demand from the south. Simultaneously, drought in Mexico has facilitated supply to meet that demand. As a result, the annual imported feeder cattle supply from Mexico peaked in January 2013.
However, there’s been a steady slowdown in the flow of imports since that time, which is largely the result of fewer cattle being available. As of mid-August, the annual import level is just slightly over 655,000 head – nearly 95,000 head behind last year’s pace and the lowest level since November 2011.
The trend is an important development in regard to the overall supply of feeder cattle and general direction of the feeder market. As that supply dwindles, it puts the crunch on cattle feeders from both an availability and price perspective.
Where do you see this trend headed? What implications does it possess for the overall feeder cattle market over the long-run? What impact might it have in terms of long-term strategy among feedyards – especially those in the south?
Leave your thoughts below.
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