Exchange rates and cow slaughter continued to affect beef imports in the final quarter of 2007. Heavy cow slaughter late last year increased the supply of processing meat used for products such as ground beef. Most foreign beef imported into the United States is processing meat. The weak dollar has effectively raised the price of foreign beef. The combination of increased domestic supply and more expensive foreign products has substantially decreased the demand for imported beef.
U.S. beef imports from nearly every major trading partner fell in the final months of 2007. The forecast for 2007 is 3.048 billion pounds of imported beef, which would be the third straight year of declining beef imports. The decline in imports is anticipated to continue, particularly early into 2008, as the resultant meat from the heavy domestic cow slaughter works its way to the marketplace and the dollar remains relatively weak. A slowing economy and the availability of competing meats should also contribute to weaker imports in 2008.
U.S. beef exports also slowed in the fourth quarter of 2007. After accelerating in the second and third quarters, U.S. exports to Japan appear to have since weakened. Domestic wholesale prices of high-value beef have been increasing, potentially affecting export markets. Concerns of a global economic slowdown may also be a major reason for the slower growth in U.S. beef exports, despite the weak dollar, which would make U.S. beef more competitive. New markets have been developing, however. Weekly export sales reports over the past few weeks have shown Vietnam becoming a larger market for U.S. beef. Vietnam joined the WTO in 2007 and has since reduced tariffs on beef. Total export forecasts in 2007 and 2008 are lowered to 1.431 billion pounds and 1.670 billion pounds, respectively, as the developing markets will not eclipse the decline in major export markets.