Cattle Outlook: Export Potential From Korea FTA

US - Congress has approved the three free trade agreements (South Korea, Colombia and Panama) submitted by the President last week. The greatest potential for the US livestock industry comes from the South Korean trade pact. South Korea is one of the top four foreign buyers of both US pork and beef.
calendar icon 18 October 2011
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Ron Plain
Ron Plain

We are currently supplying a little less than 40 per cent of South Korea's pork and beef imports. That will not change overnight as the agreement calls for a 10 year phase out of South Korea's pork tariffs and a 15 year phase out of their beef tariffs.

US beef exports during August were up 30.2 per cent compared to 12 months earlier. Exports equaled 11 per cent of production. Through August, beef exports are up 27.3 per cent compared to a year earlier. Canada, South Korea and Japan account for 68 per cent of the year's increased exports. All major foreign buyers are up for the year except for Viet Nam and Taiwan. Exports are on pace to break the 2003 record.

US beef imports were down 9.4 per cent in August. August imports equaled 7.9 per cent of US beef production. For the first eight months of the year, beef imports are down 15.7 per cent and are on pace to be the lowest since 1996.

Through August cattle imports from Canada are down 40 per cent, but cattle imports from Mexico are up nearly 30 per cent.

Friday morning the choice boxed beef carcase cutout value was $185.27/cwt, up 35 cents from last week. The select carcass cutout was down $1.40 from the previous Friday to $168.56 per hundred pounds of carcass weight. The choice-select spread, $16.71, is the largest since December 2007.

The five-area average price for slaughter steers sold through Thursday of this week on a live weight basis was $119.00/cwt, down $1.97 from last week. Steers sold on a dressed weight basis averaged $187.78/cwt, $2.12 lower than the week before. This week last year live steer prices averaged $96.41/cwt and dressed steers averaged $152.17/cwt.

This week's cattle slaughter totaled 650,000 head, down 2.4 per cent from the week before and down 1.8 per cent compared to the same week last year. The average steer dressed weight for the week ending 1 October was 855 pounds, unchanged from the week before and up one pound from a year ago.

Cash bids for feeder cattle around the country this week were mostly between steady and $4 higher.

Prices this week at Oklahoma City were steady with price ranges for medium and large frame #1 steers: 400-450# $146.50-$156, 450-500# $141.50-$155, 500-550# $138-$148.50, 550-600# $134-$146.25, 600-650# $125-$145, 650-700# $125-$141.75, 700-750# $138-$144.50, 750-800# $132-$139, 800-900# $138 and 900-1000# $116.75-$125.

The October live cattle futures contract ended the week at $121.65/cwt, down 32 cents from last week's close. December cattle gained $1.35 to end the week at $123.20/cwt. February fed cattle settled at $125.37/cwt, up $2.17 from last Friday.

TheCattleSite News Desk

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