U.S. exports of live female cattle, either as dairy or beef replacements, continue to face strong headwinds, noted Tony Clayton, Clayton Agri-Marketing Inc., Jefferson City, Missouri. Sales of dairy embryos, however, appear to be a growth market.
The latest monthly report from USDA’s Foreign Agricultural Service (FAS) estimated August sales of U.S. dairy heifers to foreign buyers at just 216 head, the sixth month this year in which exports were below 260 head. As in recent months, nearly all the dairy replacements stayed close to home, with 106 moving to Mexico and 105 to Canada.
Through August 2022, exports of U.S. dairy replacements were estimated at 6,583 head, averaging less than 825 per month and on pace to be the lowest annual total since 2007.
Monthly U.S. dairy heifer exports averaged more than 2,000 head in 2017, 2018 and 2021, down from peaks of 6,100 and 5,580 per month in 2011 and 2013, respectively.
Clayton said he expects the current dairy heifer export market trend to continue for some time. Major contributors to the slowdown are the tight U.S. supply of Holstein heifers bred to Holstein bulls and international buyer reluctance to accept dairy heifers bred to beef bulls.
Compounding the challenge of limited supplies, the high value of the U.S. dollar against other currencies creates unfavorable exchange rates for foreign buyers, adding to U.S. cattle and transportation costs. Pakistan, the leading market for U.S. dairy heifers in 2021 and year-to-date 2022, has turned to the Netherlands to source replacement heifers after losing a large number of cattle to flooding.
The global dairy replacement heifer market has other headwinds impacting the U.S. Due to costs, another country seeking to build its dairy herd, China, has turned to Chile in search of cattle, Clayton said. However, Chinese buyers will face an additional challenge when cattle from New Zealand are banned from import in April 2023. That ban will also negatively impact New Zealand, where large numbers of cattle will no longer have a market destination, he added.
The dairy industry in Indonesia has been rocked by a recent outbreak of foot-and-mouth disease (FMD) and will need to repopulate its cattle herd. However, with supplies limited in the U.S., that demand must be spread to other exporters.
Exports of beef replacement heifers didn’t fair much better than their dairy counterparts. At 201 head, August exports were the lowest monthly total of the year. Year-to-date beef replacement exports are estimated at 5,794.
High beef prices, high feed prices and drought-limited feed supplies are pushing more beef cows and heifers into slaughter markets. With global beef prices rising, Clayton expects it could take three to four years for export markets to stabilize.
Dairy embryo sales climb
Dairy embryos remain an export growth market. At 2,423, August’s exports were the highest since December 2020. China remained the largest market for U.S. dairy embryos during the month at 1,970, 81% of the total. Other secondary markets were Australia (211), Japan (106), Germany (96) and the United Kingdom (40).
For the January-August period, dairy embryo exports totaled 10,918, the highest eight-month total to start the year in the past five years, already surpassing the 2021 annual total of 10,332.
