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CME: US Beef Trade Balance with NAFTA Negative in Recent Years

15 January 2018

US - With talk of NAFTA back on the front pages, we thought it would be best to once again provide a synopsis of the meat and livestock trade flows between US and NAFTA countries, according to Steiner Consulting Group, DLR Division, Inc.

Rather than look at 2016, for which we have complete annual data, we thought it would be best to estimate 2017. Please note that the following table is based on actual data through November plus our trend estimate for December.

A couple of things that stand out on review:

Beef: The US beef trade balance with NAFTA has turned negative in recent years. The US has always been a large net importer of cattle from both Mexico and Canada. Almost all Mexican cattle coming into the US are feeder cattle that are shipped into feedyards in Texas, New Mexico and other nearby states. We currently estimate that total imports of Mexican Cattle in 2017 were 1.057 million head, with a value of $662.8 million. This represents a 12 per cent increase in volume and 13 per cent increase in value compared to 2016. In addition, the US imported an additional 602k head of cattle from Canada. Some US cattle also move north of the border but the US remains a large net importer of Canadian cattle. One of the lines in the table is called 'net trade', i.e. exports minus imports. In 2017 our cattle trade balance with Canada was negative 441k head. Total net cattle trade balance with NAFTA countries was –1.457 million head or -$1.2 billion. In the past the US was a net exporter of beef into NAFTA but that has changed as well. We estimate that in 2017 the US ran a negative beef trade balance with these two countries. Net beef trade with Mexico was a negative 62,000 MT (-$191M) while net beef trade with Canada was negative 131.5k MT (-$400M). When you total both cattle and beef, the US ran a negative trade balance with NAFTA of around $1.8 billion. These numbers do not include variety meats, hides or any other such products.

Pork: The US has been running a positive pork trade balance with Mexico in pork and this market is now the top buyer of US pork products. We estimate US pork shipments to Mexico for 2017 at around 660k MT, 12 per cent higher than the previous year and accounting for over a third of all US shipments. The value of pork exports to Mexico in 2017 is estimated at $1.256 billion, about a quarter of the value of all US pork exports. On the other hand, the US ran a negative trade balance with Canada. Swine imports in 2017 were estimated at 5.17 million head, mostly feeder pig, with a value of around $320 million. In addition, the US purchased around 104k MT more pork from Canada than we exported there, with a net trade balance of negative $144 million.

The table above also includes poultry exports so as to calculate the trade balance in meat/livestock. Total trade balance with Mexico in 2017 was +$1.2 billion while trade with Canada was –$1.165 billion, leading one to conclude that, in terms of the livestock/poultry trade, Canada has more to lose in the event of US pulling from NAFTA.

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