Feed Lot

SEP-OCT 2017

Feedlots and cow/calf operations in the beef industry who feed 500 or more has annually on grains and concentrates; maintain 500 or more beef cows; backgrounder, stocker/grower, preconditioner; veterinarian, nutritionist, consultant

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a nd exports to Japan and China are u p 20 and 8 percent respectively. E xports to the Middle East are up 30 percent from this time last year. Brazil is facing its own dilem- m as. Politics and questionable beef i nspection practices are putting Brazilian beef in the news and eroding consumer confidence. Rabobank cites a 10 percent de- cline in exports the first five months of the year compared to 2016 due to restrictions placed by many international markets. May began to rebound, 28 percent above April, but still 10 percent be- low May 2016. In India, the political fight con- tinues over the Hindu-backed ban on the trade of cattle for slaughter. Going solo U.S. producers are not immune to the effects of politics on their export potential. The U.S. with- drawal from the Trans-Pacific Partnership may have been wel- come news for some, but most of agriculture was not thrilled. The 11 remaining nations are now involved in as many as 27 sep- arate trade negotiations, many aimed at reducing import tariffs the U.S. continues to face. Talks are in progress, but indications are com- petitors are gaining market share. Within weeks of the U.S. with- drawal, Japan offered the EU, which is not a member of TPP, sim- ilar access to what the U.S. had negotiated. The EU is also moving forward with deals with Vietnam and Malaysia. According to the Rabobank report, first quarter ex- ports from the EU are up 20 percent from last year. Notable increases were to Hong Kong, the Philippines, the Middle East and Africa. Too much of a good thing U.S. exports to Japan have trig- gered a safeguard tariff increase on frozen imports. Japan maintains separate quarterly import safe- guards on chilled and frozen beef, and imports of frozen beef are al- lowed to increase by 17 percent compared to the corresponding quarter of the previous year. The duty increases from 38.5 percent to 50 percent when imports exceed the safeguard volume. According to U.S. Meat Export Federation (USMEF) data, first quarter U.S. beef sales to Japan increased 42 percent over 2016. But, 2016 imports were lower than previous years, thus the increase was, in part, the result of rebuilding inventories. The U.S. and Japan are operating under a 1994 agreement, and in re- cent trade agreements with beef- supplying countries, Japan has aban- doned the quarterly quota approach to implementing annual safeguards, which are much less likely to be trig- gered by import fluctuations. The impact of the increased im- ports likely had little effect on Japanese domestic producers, but the impact of the tariff increase will be felt throughout the U.S. "We're very disappointed to learn that the tariff on frozen beef 10 FEED•LOT  September/October 2017 MARKETING Exports Stay Strong... from previous page

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