According to USDA, there are new rules to regulate how Canadian cattle are allowed into the country. Canadian exporters will have to adapt to new rules on everything from the way trucks are sealed to age-verification procedures. Some officials say adapting to the new rules may postpone trade for another three to four months.
In the domestic market, meanwhile, conditions are ripe for expansion of the cattle herd. Pasture and rangeland conditions have improved, feed grain prices have moderated, and fed cattle prices have stayed profitable.
Even so, USDA predicts some areas of production this year will see declines.
Commercial beef production is estimated to be 25.7 (B) billion pounds this year ... 400 (M) million pounds less than the USDA had projected for 2005.
The new estimate comes after Agriculture Secretary Mike Johanns decided to not allow meat from older Canadian animals into the United States on March 7. That's the date set to allow beef north of the border back into the country following a nearly two-year ban due to the discovery of Mad Cow disease in Alberta.
Beef and live cattle Imports will be restricted to animals younger than 30 months.
The USDA also dropped its estimate for cattle imports, saying it expects Canada to ship about 1.3 (M) million head to the U.S. ... not two million as previously projected. The report says, "based on increased slaughter of steers and heifers in Canada, U.S. packers will have to compete more aggressively for the pool of slaughter-ready cattle, somewhat dampening an expected decline in fed steer prices."
Cattle prices should remain relatively high because of competition between U.S. and Canadian packing houses. Ranchers also have been seeing near-record prices for their cattle.