North American Cattle Trade

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

 

Canada, Mexico and the U.S. make up the bulk of the North American cattle industry and consists of 116.1 million head, with the U.S. representing 75.1 percent (87.16 million head); Mexico with 15.4 percent (17.8 million head) and Canada with 9.5 percent (11.1 million head). Cattle trade between these three countries is part of the increasingly integrated cattle and beef market on the continent.  

 

Total annual U.S. imports of cattle has averaged 1.93 million head in the past decade with an average of 1.16 million head from Mexico (60.5 percent) and Canada averaging 0.764 million head (39.5 percent).  In the first four months of 2024, cattle imports were 762,450 head, up 17.1 percent year over year. Cattle imports from Mexico were up 17.3 percent and imports from Canada were up 16.8 percent over one year ago.  Cattle imports from January-April consisted mostly of feeder cattle (69.9 percent) with 90 percent of those from Mexico.   Cattle imports from Mexico are almost entirely feeder cattle (99.4 percent), with just a few breeding and slaughter cattle.  Feeder cattle make up just 18.9 percent of cattle imports from Canada. In addition, cattle imports from Canada include 60 percent fed cattle for slaughter and 19.6 percent slaughter cows and bulls.  

 

The U.S. does export some cattle to Mexico and Canada.  The vastly larger size of the U.S. market means that imports inevitably far exceed cattle exports.   Cattle exports to Mexico and Canada have averaged 13.8 percent of imports in the past decade but were as high as 28.8 percent of the level of imports in 2021.  In that year, total cattle exports were 0.511 million head with 77.1 percent to Canada, 18.1 percent to Mexico, and 4.8 percent to other destinations.  From January-April this year, a total of 116,084 head of cattle have been exported from the U.S. with 90.9 percent destined for Canada (82.0 percent) and Mexico (8.9 percent). 

 

Cattle prices in the U.S. are currently at or near record levels and moving higher.  International markets generally respond to U.S. cattle and beef market conditions in a predictable and expected manner.  High U.S. cattle prices will attract more cattle from available sources and it is not surprising for cattle imports to increase somewhat in this situation.  However, it is important to remember that the relative sizes of the North American markets limit the extent of possible trade flow changes.  The U.S. cattle industry is nearly five times the size of the Mexican cattle industry and nearly eight times the size of the Canadian industry.  Changes in trade will result in relatively minor market adjustments but will not change the level or trajectory of U.S. cattle prices. 

 

 

The Cowboy Math of Mature Cow Size and Calf Revenue Generated 

Mark Z. Johnson, Oklahoma State University Extension Beef Cattle Breeding Specialist

 

I recently attended the 2024 Beef Improvement Federation meetings in Knoxville, TN. Interesting topics covered by an excellent panel of speakers from which I pull some information together for this week’s topic. Did you know?

• The U.S. cow herd has been steadily increasing in mature weight for several decades. Excess mature weight of cows has several downsides. The focus of this article is its impact on profitability in commercial cow-calf operations.
• For each 100 head of 1,000 pound cows you could run in your cow-calf operation, the same forage base (and feed input cost) would sustain 71 head of 1,400 pound cows.
• For each 100 pound increase in mature weight, cows average approximately 10 more pounds of calf weaning weight produced.

 

The Cowboy Math

For the sake of this article, some assumptions are necessary, these are:

• the 1,000 pound cows will wean calves weighing 450 pounds
• a value of $3.00/pound for calf weaning weight
• a 90% calf crop weaned for both groups of cows 

 

Therefore, the 100 head of 1,000 pound cows will wean 40,500 pounds of calf pay weight with a total value of $121,500. For example: (100 cows x 90% x 450 pounds x $3 per pound)

 

The 71 head of 1,400 pound cows will wean 64 calves weighing 490 pounds for a total of 31,360 pounds of calf pay weight with a total value of $94,080. (71 cows x 90% rounded up to 64 calves) x 490 (assuming an extra 10 pounds of weaning eight per 100 pounds of mature cow weight) x $3 per pound.  

 

Bottomline

Yes, the Cowboy Math tells us the same forage base and feed cost could result in $27,420 more revenue generated annually. No, the 490 pound (heavier) weaned calves will not be worth as much per pound as the 450 pound calves. Taking that into account would exaggerate the difference in revenue generated to the advantage of the more moderate size cows.

 

This fall at weaning I encourage producers to weigh your cows and your calves. Those measurements can help to determine if excess mature cow weight is robbing profit potential from your operation. 

 

References

Beef Improvement Federation Symposium. Cow Longevity: Economics & Genetic Solutions. Dr. Bob Weaber. June 11, 2024

 

Beef Improvement Federation Symposium. The Full Picture of Cow Efficiency. Dr. David Lalman. June 11, 2024

 

 

Selling Your Beef Direct-to-Consumer

Courtney Bir, Oklahoma State University Agricultural Economics, Extension Specialist Farm Management and Agricultural Finance

Rodney Holcomb, Oklahoma State University Agricultural Economics, Extension Food Industry Economist

 

Facing tight margins, many producers may be considering marketing alternatives. One option that has increased in popularity since the COVID-19 pandemic is selling direct-to-consumers. When you sell directly to consumers, it’s a big change. You are no longer selling livestock (agricultural commodity), you are marketing beef (packaged food product). This may seem like a small difference but feeding out (or grazing longer) cattle for slaughter and selling beef to the end consumer adds complexities to your cow-calf or stocker operation. Plus, the end consumer may have certain expectations or preferences for the beef consumed by their family. 

 

One of the first steps to considering direct-to-consumer beef sales is understanding the different types of meat inspection. Custom exempt may be the easiest option to start with. Under custom exempt processing, the animal is not processed under any form of inspection and cannot be sold as individual cuts. This meat can only be consumed by the buyer of the live animal and non-paying guests, which is why the packaging is marked “not for resale.” You are selling the live animal to the end consumer. You may have multiple buyers, for example- 4 different families each purchasing one quarter. You may even take the sold animal to the processor for the buyer. The end consumer works with the processor on filling out the cut sheet (carcass breakdown instructions). It would be a good idea to be familiar with the cut sheet of the processor you commonly use, as consumers may reach out to you with questions before making their purchase. The consumer will pay for the processing and pick up the meat when it is ready. There are more custom exempt processors in the state of Oklahoma than state and federally inspected- which increases your options. Custom exempt is easier to price, you must sell on a per head or live weight basis, so it is easier to determine your costs and add an appropriate profit margin. Additionally, you are only selling a whole animal or shares of the animal in comparison to selling many individual cuts of meat. 

 

State inspected plants have an ODAFF inspector performing pre- and post-mortem inspections of the animal/carcass, and this allows you to sell individual cuts of meat within the state of Oklahoma. Under federal (USDA) or Talmadge Aiken Act (USDA/ODAFF partnership) inspection, you can sell products across state lines and maybe internationally (requires additional global certification). Selling individual cuts of meat may require additional freezer space, or a location where consumers can shop. Other options would include a subscription service or online sales. One point of difficulty is pricing. It can be difficult to price several individual cuts of meat, knowing there is a relationship in price (for example hamburger tends to be cheaper than steaks) while trying to attract customers and ensure a profit. 

 

In general, direct-to-consumer meat sales can be a good option for some producers. Things to keep in mind include- the costs of feeding out cattle, the proximity of processing plants that have the type of inspection you want and finding market outlets for every animal or cut of beef. You may be driving long distances for processing depending on the location of your operation. Where are your customers, and what are their preferences? They are likely to purchase from you because they like local foods or are interested in your story.