• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

Mexico's Beef Market

HerefordSire

Well-known member
Joined
Aug 2, 2006
Messages
5,212
Reaction score
0
Location
Arkansas
Here are our two largest beef export markets:

As of June 2009...
Exports to Mexico $332,941,000
Exports to Canada $300,483,000


When our US dollar falls as the result of increased supply of currency to support our deficits, what will happen to exports to Mexico and Canada? Will our exports to these trading partners skyrocket and put pressure on beef cattle producers in these countries?

Leading Markets for U.S. Beef Exports
January - June 2009

http://www.usmef.org/TradeLibrary/files ... 09%201.pdf
 

HerefordSire

Well-known member
Joined
Aug 2, 2006
Messages
5,212
Reaction score
0
Location
Arkansas
I pulled a real time foreign exchange chart of the USD/CAD. I am viewing 1970 to 8/2009 on a monthly time interval. The low of the last 39 years was recently set about the same time as the US stock market tops. I have the opinion a new low will be set soon. If I am correct, this could make US beef exports skyrocket to Mexico and Canada and beef producers of these countries could be forced out of business. What do you think?

Here is the link I sometimes use to trade currencies:


http://www.dailyfx.com/charts/Chart.html?symbol=USD/CAD

To see what I am seeing, set the time to monthly and zoom out so you can see all back to 1970 and still can see 8/2009. You may need to maximize your window and tear the screen off (detach the screen).
 

Alberta farmer

Well-known member
Joined
Nov 13, 2008
Messages
376
Reaction score
0
Canada will soon become a net importer of beef. There has always been a fair amount of trade in beef across the border. A lot of Canadian calves have always been fed in the USA. COOL and a lower US dollar has put a damper on that trade but the fact is if the Canadian herd continues to shrink the USA will have a hard time getting enough beef for domestic use?
The "experts" say our Canadian dollar will reach par by the end of the year. If that happens all sorts of US goods will start to move into Canada and US consumers will see a real rise in prices on just about everything.
 

HerefordSire

Well-known member
Joined
Aug 2, 2006
Messages
5,212
Reaction score
0
Location
Arkansas
A little Canadian history after NAFTA but before the Canadian BSE issues...

CANADIAN FARMERS ALSO HURT

Despite Canada’s agricultural trade surplus with the U.S.,
small-scale farmers have been hit hard as the opening of
their domestic market has subjected them to the low prices
and high volatility of the NAFTA’s export-driven model. In
Canada, farm debt nearly doubled since the 1988 Canada-
U.S. Free Trade Agreement (CUFTA) and its expansion into
NAFTA — from C$22.5 billion in 1989 to C$44.2 billion in
2001. According to the Canadian National Farmers Union,
net farm income in Canada dropped a staggering 24%
across the same period. These enormous pressures have
taken their toll on Canadian farmers:by 2002, nearly 50,000
Canadian farmers had been forced from their jobs and off
the land since CUFTA came into effect in 1988. Between
1996 and 2001 alone, Canada lost 11% of its family farms.
While CUFTA and NAFTA boosters in Canada promised
new markets for Canada and farm co-ops, the main result
has been greater corporate consolidation of agriculture and
food production in Canada.Since CUFTA went into effect in
1988, the four main farming co-ops in Canada,
Saskatchewan, Alberta, Manitoba Pools and United Grain
Growers, have been consolidated into Agricore United of
which the U.S. multinational ADM now owns a large
portion. Saskatchewan Wheat Pool and U.S.-based Cargill
control 75% of western-grain handling; ADM also now
controls nearly half of Canadian flour milling capacity;
ConAgra owns 64% of Canada’s malt milling plants, and
Cargill and meatpacker IBP owned over two-thirds of all
Canadian beef-packing plants. As the NFU noted in recent
testimony to the Canadian Senate Standing Committee on
Agriculture and Forestry, “almost every link in the chain,
nearly every sector is dominated by between two and ten
multibillion-dollar multinational corporations.”

http://www.citizen.org/documents/NAFTA_10_ag.pdf
 

HerefordSire

Well-known member
Joined
Aug 2, 2006
Messages
5,212
Reaction score
0
Location
Arkansas
So far this year, livestock and meat exports to Canada down 10%....

Livestock & Meats

Exports to Canada (in thousands of USD)

..2004........2005....... 2006.......... 2007........ 2008........ Jan - Jun 2008..... Jan - Jun 2009

775,278... 993,957...1,367,884.....1,688,576....1,936,547....... 962,349.............861,881

http://www.fas.usda.gov/gats/default.aspx
 

HerefordSire

Well-known member
Joined
Aug 2, 2006
Messages
5,212
Reaction score
0
Location
Arkansas
Last year's forecast...but get ready for another huge parabolic run...

 

Alberta farmer

Well-known member
Joined
Nov 13, 2008
Messages
376
Reaction score
0
Herefordsire: I might suggest that USA meat exports to Canada might be down this year for a simple reason: Cattle and hog prices up here are really poor? Pretty tough to export into a Canadian market where the price for live cattle is 20% lower than the USA?
Note the large number of exports in 2008 when the Canadian dollar was worth more than the US dollar? The "experts" tell us we will reach par before the end of the year which will make more USA exports viable?
This unstable currency variation can be very detrimental to trade...both ways! In the fall of 2008 when the Canadian dollar reached over $1.10 many Canadians tried to buy cars and trucks in the USA. I was looking for a new one ton work truck. My local dealer quoted me $43,000 Can. I found the same truck in south Carolina for $28,000 US...or $25,455 Can! I phoned the dealer and said I'd be on the next plane. When he learned I was in Canada he told me he couldn't sell it to me or the company would cancel his franchise! Well so much for free trade? The truck was built in Canada by the way. I wonder if it is still sitting on his lot?
 

HerefordSire

Well-known member
Joined
Aug 2, 2006
Messages
5,212
Reaction score
0
Location
Arkansas
Alberta farmer":27438k7p said:
Herefordsire: I might suggest that USA meat exports to Canada might be down this year for a simple reason: Cattle and hog prices up here are really poor? Pretty tough to export into a Canadian market where the price for live cattle is 20% lower than the USA?

Note the large number of exports in 2008 when the Canadian dollar was worth more than the US dollar? The "experts" tell us we will reach par before the end of the year which will make more USA exports viable?
This unstable currency variation can be very detrimental to trade...both ways! In the fall of 2008 when the Canadian dollar reached over $1.10 many Canadians tried to buy cars and trucks in the USA. I was looking for a new one ton work truck. My local dealer quoted me $43,000 Can. I found the same truck in south Carolina for $28,000 US...or $25,455 Can! I phoned the dealer and said I'd be on the next plane. When he learned I was in Canada he told me he couldn't sell it to me or the company would cancel his franchise! Well so much for free trade? The truck was built in Canada by the way. I wonder if it is still sitting on his lot?

As you know, currency differentials affects supply and demand intersections. So even though prices may be 20% lower in Canada year over year, prices could still be more attractive for the US to export because of the exchange rate. That is the point of my post. Our dollar should tank in the future versus the Canadian dollar. True, there may be a lag, as the export drop so far this year has been 10%, but she looks like she is going to run on another parabolic curve.
 

Latest posts

Top