THE ongoing trade war between the U.S., Canada and the European Union continues to roil the stock market. The war includes President Trump’s decision to impose huge tariffs on Canadian and EU steel and aluminum exports to the U.S. Trump initially threatened to impose an additional 25% in tariffs on these products on top of a 25% tariff already set to go into effect last Wednesday. But he backed down on this threat the day before after an agreement announced by Ontario Premier Doug Ford and U.S Commerce Secretary Howard Lutnick to suspend a planned 25% surcharge on electricity from Ontario sent to U.S. customers that Ford had warned he would impose.
The withdrawal of the surcharge came alongside an agreement to hold a meeting at the White House last Thursday to discuss a renewal of the trade agreement between the U.S. and Canada, the statement said. Trump’s announcement that he would double tariffs on Canadian steel and aluminum came after Ford threatened the electricity surcharge. Even with the new deal, the original 25% tariffs on steel and aluminum imports from all countries went into effect last Wednesday as planned. The U.S. imports more steel and aluminum from Canada than any other country.
Canada And The EU Retaliate
Canada and the EU quickly announced retaliatory tariffs in response to Trump’s move. Canada said it was imposing tariffs of $20.7 billion starting last Thursday on U.S. steel and aluminum products, as well as goods including computers, sports equipment and water heaters worth $9.9 billion. That is in addition to the 25% counter-tariffs on $20.8 billion of imports from the U.S. that were put in place on March 4 in response to other Trump import taxes that he has partially delayed by a month. The EU announced its own counter-measures last Wednesday. European Commission President Ursula von der Leyen said that as the U.S. was applying tariffs worth $28 billion, the EU was responding with counter-measures worth 26 billion euros or about $28 billion. Those measures, which cover not just steel and aluminum products but also textiles, home appliances and agricultural goods, are due to take effect on April 1. In response, Trump on Thursday threatened to put a 200% tariff on all EU wine and champagne exports to the U.S.
Last week’s developments amplified concerns about tariffs that have roiled the stock market and stirred recession risks. The U.S. tariffs leave its trading partners with a difficult choice over retaliation, said The Wall Street Journal. Hitting back with tariffs against American products might act as a deterrent against further U.S levies or bring the Trump administration to the negotiating table. But they also risk doing further harm to trading partners’ own economies, said the WSJ.
Meanwhile, China retaliated against Trump’s additional 10% tariffs on all its exports to the U.S. by putting an additional 15% tariff on key U.S. farm products, including chicken, pork, soybeans and beef. The escalating trade tensions between the two countries punished the markets last Monday as investors fearful of the damage from Trump’s trade wars put their money elsewhere. In another development, Trump’s decision to not exempt Australia from U.S. tariffs on steel and aluminum has elevated red meat industry concerns in Australia about possible action against ag product imports into the US. After the White House confirmed that it is not granting Australia or any other nation an exemption from the tariffs, Australian Prime Minister Anthony Albanese said the 25% tariff decision on steel and aluminum was concerning and entirely unjustified.
BEEF EXPORTS ARE OFF TO GOOD START
U.S. beef exports are off to a positive start in 2025.Exports trended higher than a year ago in January, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Pork exports were slightly below last January’s large totals despite another outstanding performance in Mexico and Central America. January beef exports reached 102,840 metric tons (mt), up 3% year-over-year, while value increased 5% to $804.6M. Growth was driven in part by larger exports to China and Canada, while exports to South Korea were steady in volume but higher in value. Strong value increases were also achieved in other key markets, including Taiwan, the Caribbean, Central America and the ASEAN. Exports of beef variety meat were the largest in nearly two years, led by larger shipments to Mexico, Egypt, Canada and China/Hong Kong.
Demand for U.S. beef came on strong in the Asian markets late last year and that momentum largely continued in January, says USMEF President and CEO Dan Halstrom. The performance in Korea is especially encouraging, given the country’s political turmoil and slumping currency. It is also gratifying to see exports trending higher to China, although USMEF is concerned about access to this market moving forward, as many U.S. beef and pork plants are awaiting word on their eligibility beyond mid-March, he says.
Pork exports totaled 243,965 mt in January, down 3% from a year ago, while value eased 2% to $668M, says USMEF. Shipments soared to Central America and continued to trend higher to leading market Mexico. Exports also increased year-over-year to China/Hong Kong, the Philippines, Australia and New Zealand. But these results were offset by sharply lower shipments to Japan, Korea and Colombia. U.S. pork is coming off a record-breaking year in 2024 and USMEF sees opportunities for continued growth this year, says Halstrom.
Western Hemisphere Markets Are Critical
The U.S.’s Western Hemisphere pork markets are obviously critical to 2024’s success, so the White House pausing tariffs on some goods imported from Mexico and Canada is certainly encouraging news, says Halstrom. Duty-free access to Mexico, Canada and other free trade agreement partners has definitely underpinned global demand for U.S. red meat and delivered essential returns at every step of the supply chain. The majority of U.S. red meat exports are to countries with which the U.S. has trade agreements. Maintaining trust and access to these markets is critical to the continued success of the U.S. industry, he says.
January beef exports to leading value market Korea were steady with last year at 18,801 mt, while value climbed 7% to $182.4M, says USMEF. Although January shipments were below the levels achieved in the fourth quarter of 2024, Korea’s demand for U.S. beef has held up well despite ongoing economic uncertainty stemming from the impeachment of embattled President Yoon Suk Yeol, with the Korean won recently trading at its lowest levels versus the U.S. dollar since 2009.
Beef exports to China totaled 15,920 mt in January, up 35% from the low volume posted a year ago, while value climbed 34% to $137.3M, says USMEF. Similar to Korea, China’s demand for U.S. beef rebounded significantly in the second half of 2024. But the U.S. industry faces great uncertainly in China as the registrations for most exporting establishments are set to expire March 16. U.S. officials are working to resolve the issue but if these plants are no longer eligible after mid-March, this will largely unravel the market access gains achieved under the U.S.-China Phase One Economic and Trade Agreement, and the billions of dollars in trade this agreement unlocked for the U.S. industry. U.S. beef will soon be subject to an additional 10% tariff in China, bringing the total to 22% effective March 10. Exports to Hong Kong (which totaled 2838 mt in January, valued at $25.7M) are not impacted by the plant eligibility issue and are not subject to the retaliatory tariffs.
Beef exports to the Middle East rebounded impressively in 2024 and continued to trend higher in January, says USMEF. Exports totaled 5120 mt, up 5% from a year ago, while value increased 13% to $21.5M. This was driven primarily by robust beef variety meat shipments to Egypt, which were the highest since December 2022 and climbed 10% in volume (3994 mt) and 25% in value ($6.9M).
Exports to Mexico Fell 2%
January beef exports to Mexico were down slightly from a year ago, declining 2% in both volume (19,724 mt) and value ($110.1M), says USMEF. But beef variety meat exports were a bright spot, as volume reached the highest level since 2016, climbing 16% to 11,871 mt, valued at $31.3M (up 15%). Mexico is the top export destination for U.S. exports of beef tripe, intestines, hearts and lips. In January, exports of U.S. beef tripe to Mexico accounted for $8.14 per head of all fed cattle harvested, lips were $3.84, hearts were $2.34 and intestines were $0.49.
January beef exports to Canada climbed 20% from a year ago to 8457 mt, while value increased 2% to $65.9M, says USMEF million. The modest increase in value was mainly due to variety meat making up a larger share of the product mix, as variety meat exports jumped 154% to 1300 mt, the highest since 2012. Exports to the Caribbean, which were record large in 2024, continued to expand in January as shipments increased 3% to 2,757 mt, valued at $24.6 million (up 18%). Growth was driven mainly by strong demand in the Dominican Republic, the Bahamas, the Netherlands Antilles and Turks and Caicos.
Central America also took record shipments of U.S. beef last year. Although January exports to the region were down slightly in volume (1,931 mt, down 1%), export value soared 24% to $15.7M. Exports to Costa Rica climbed 92% to 556 mt, with value more than doubling to $4.5M (up 125%). Robust growth was also achieved in Honduras. Exports to top market Guatemala were 5% below last year’s high level but remained strong at 850 mt, while export value increased 13% to $7.35M.
January exports to South America dipped 7% from a year ago to 1371 mt, but value still climbed 13% to just under $10M, says USMEF. Shipments to Chile were up 41% to 380 mt from last year’s low volume and jumped 53% in value to $3.6M. Although exports to Colombia remained below last year at 339 mt (down 30%), export value reached $3.2M, up 12% from a year ago and the highest since February 2024. Exports to Colombia slowed last year due to H5N1-related restrictions but have been gradually rebounding since full access was restored in late September, says USMEF.
Value Increases To Taiwan
Beef exports to Taiwan totaled 3140 mt, down 2% from a year ago but value increased 7% to $38.5M, says USMEF. Shipments to Taiwan gained momentum in the second half of 2024, reaching the second highest value on record at $709.2M. Taiwan has one of the highest unit export values for U.S. beef and in January, the U.S. captured 73% of Taiwan’s imported chilled beef market. Japan’s demand for U.S. beef took a step back in January, declining 10% from a year ago to 19,076 mt, while value dropped 9% to $139.5M. Variety meat exports, mainly tongues and skirts, fell 12% in volume (3265 mt) and 24% in value ($29.6M). Despite this decline, January exports of beef variety meat reached 25,838 mt, up 11% from a year ago and the highest since May 2023. Value fell 3% to $86.4M, reflecting the fact that tongues to Japan are the highest value item in this category. In addition to the aforementioned growth in Egypt, Mexico and Canada, variety meat shipments also increased to China/Hong Kong, Chile, Trinidad and Tobago, the Bahamas, Costa Rica and Panama. January beef exports equated to $371.37 per head of fed slaughter, up 3% from a year ago. Exports accounted for 12.7% of total beef production and 10.2% for muscle cuts only, each down slightly from a year ago, says USMEF.
Meanwhile, Australian beef exports are off to a hot start in 2025, with both January and February shipments unusually large. The two-month total was record high at more than 198,000 mt. Even the frantic herd liquidation years of 2019-20, and 2014-2015 did not come close to that number for January-February trade, with exports not exceeding 173,000 mt in any of those years, says Beef Central. For February, beef export volumes hit 117,502 mt, up 44% on January, which is the quietest month of the year for Australian beef exports. Last month’s figure was up 24,000 mt or 25% on February last year, making it one of the biggest February shipment figures on record. Limited weather impact at a time of year that can often produce disruptions, especially in the largest beef producing and processing state of Queensland, was a factor, says Beef Central.
CATTLE ON FEED FORECASTS
David Anderson, Texas A&M University: COF 98.8%, placed 89.0%, marketed 91.8%; Kevin Coburn, S&P Global Commodity Insights: COF 98.8%, placed 89.2%, marketed 88.7%; Tyler Cozzens, Livestock Marketing Information Center: COF 99.0%, placed 90.5%, marketed 92.3%; Andrew Gottschalk, HedgersEdge.com: COF 97.8%, placed 82.0%, marketed 91.6%; Rich Nelson, Allendale Inc: COF 97.0%, placed 79.1%, marketed 93.2%; Lori Porter, Allegiant Commodity Group: COF 98.4%, placed 86.5%, marketed 91.6%; Mike Sands, MBS Research: COF 98%, placed 83%, marketed 91%
COF TOTAL FALLS AGAIN
THE monthly Cattle On Feed (COF) total falls below a year ago for the third month in a row. The March 1 total was expected to be around 11.58M head, which would be down 2% from the prior year. This reflected far lower placements in February than last year. Analysts’ estimates varied from a low of 79.1% of last year to 89.0% of last year. February marketings were expected to be about 92% of last year. Front-end fed cattle supplies (COF 150 plus days) on March 1 were estimated to be 2.777M head, says Andrew Gottschalk, HedgersEdge.com. This was 1.7% above the previous year and 12.3% above the previous five-year average, an increase of 304,000 head. Total cattle on feed numbers peaked during February and should trend lower into August. The previous five-year average seasonal decline from March to August is 744,000 head, he says.
The month-to-month volatility in feedlot placements and marketings continued during February, with sharp declines in both placements and marketings, says Mike Sands, MBS Research. Much of that variability was related to last year’s weather disruptions and the comparisons against that base. While February placements were projected much smaller than last year, the comparison was being made against a record large number in February 2024, which was bolstered by a large carryover from the small number placed the previous month. Besides February 2024 placements being record large for the month, they were also larger than January, again an unusual occurrence. Through the early stages at least, 2025 feedlot placements are following a more typical seasonal pattern, he says.
Taken together, Jan/Feb placements were about 8% smaller than last year, says Sands. Extending that theme, over the past four months, feedlot placements are down more than 400,000 head or about 6%. While the smaller placements are just beginning to affect feedlot inventories, the smaller resulting fed cattle supplies will be delayed later into the spring and summer. The effect of smaller fed cattle supplies will continue to be tempered by heavy carcass weights as cattle feeders spread the high feeder cattle purchase costs across heavier sale weights, he says.
Meanwhile, very little cash live cattle trade had occurred through Thursday. Only 863 head were reported sold Wednesday, at $200 per cwt live in Kansas and at $198 per cwt live in Iowa. The week before last saw 5-area steer prices average $200.28 per cwt live or $316.43 per cwt dressed. These were up $2.63 per cwt and $3.51 per cwt, respectively. Carcass weights declined again in the latest reported week ended March 1 but remained well above year ago levels. Steer weights averaged 942 lbs, down 4 lbs on the week before but up 23 lbs on the same week last year. Heifer weights averaged 867 lbs, up 1 lb from the week before and up 21 lbs on the same week last year. Overall weights averaged 870 lbs, down 5 lbs on the week before but up 30 lbs on the same week last year. This was the equivalent of adding 20,315 head to that week’s slaughter total of 568,747 head.
Meanwhile, the national comprehensive boxed beef cutout (cuts, grinds and trim) the week before last increased slightly from the prior week. It averaged $317.34 per cwt, up $0.16 per cwt. Spot market sales accounted for 29.6% of the total volume. Formula sales accounted for 55.0%, forward sales 15.4% and export sales 10.1%. The Choice cutout the first four days last week increased by $4.79 per cwt and the Select cutout increased by $1.67 per cwt.