Mexican Feeder Cattle Imports: Helping To Ease Texas Supply Constraints In 2023. Tighter Supplies In 2024
12/19/2023
The objective of this work is to highlight the flow of Mexican feeder cattle into the U.S. during 2023 along with the key drivers that helped keep the supplies moving.
Historically, Mexican feeder cattle represent a 5-10% of Texas’s placements and on-feed supplies. We see the prolonged drought in key Mexican cattle producing, and background states as a factor that is helping to cull a portion of the local beef cattle herd.
We view the historically high CME feeder cattle futures and cash cattle prices a major incentive for Mexican cattle operations to export cattle.
By pulling cattle forward, we see a scenario developing where Mexico should experience a long-term supply shock. Like the U.S., there is a lack of clarity in assessing Mexican upstream supplies at the cow/calf level.
We expect to see a modest annual 1.75-2.1% contraction of the Mexican cattle herd during 2024 and 2025 which can suppress exports to the U.S.