August 26, 2005

For more than two years, beef producers have wondered when live cattle trade would resume with Canada. That question was finally answered when the first load of Canadian cattle arrived in the United States on July 18. University of Kentucky Agricultural Economist Kenny Burdine said shipments started slowly but gradually picked up through the month of August.

“There has been a mix of fed cattle and feeder cattle moving south since the border opened,” he said. “But we’re still not seeing anywhere near the numbers that we were seeing in the first part of 2003.”

Fed cattle that come into the United States from Canada must be branded and verified to be less than 30 months of age. Canadian cattle arriving at U.S. feedlots must be young enough to be slaughtered before they reach 30 months of age. No stocker cattle, breeding stock or cull cows are being imported at this time.

“Many producers have been concerned about the impact that Canadian imports would have on the supply of cattle and ultimately the price,” Burdine said.

Kentucky feeder cattle prices did fall some during the last half of July and Burdine said resumption of Canadian cattle imports was part of the reason. But there were other factors at work as well. Poor pasture conditions and a softer fed cattle market were also pressuring calf prices. Regardless, much of this lost ground has been made up in August as prices rallied again, he said.

“U.S. beef and cattle trade has been greatly affected by the discovery of BSE in Canada and in the United States,” Burdine said. “Canadian trade is slowly returning to normal, but there are still unanswered questions about how quickly imports will pick up.”

Burdine added that the United States is still working to regain access to two of its largest markets, Japan and Korea. Estimating when trade will return with these two countries is only speculation. These uncertainties are likely to cause markets to be volatile in the coming months, he said.

“The fall feeder market is always crucial for beef producers as the majority of Kentucky calves are sold in the fall,” he said. “This fall, the market will be highly sensitive to beef demand, feedlot returns and winter grazing conditions in western states. And, of course, live cattle and beef trade will play a significant role in determining the level of prices cow-calf producers receive."


Writer: Aimee Nielson 859-257-4736, ext. 267

Contact: Kenny Burdine 859-257-7272, ext. 229