Trade & Economic Impacts of Animal Disease Outbreaks Parr Rosson Professor & Director Center for...
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Trade & Economic Impacts of Trade & Economic Impacts of Animal Disease Outbreaks Animal Disease Outbreaks Parr Rosson Parr Rosson Professor & Director Professor & Director Center for North American Center for North American Studies Studies Texas A&M University Texas A&M University C NAS
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Transcript of Trade & Economic Impacts of Animal Disease Outbreaks Parr Rosson Professor & Director Center for...
Trade & Economic Impacts of Animal Trade & Economic Impacts of Animal Disease OutbreaksDisease Outbreaks
Parr RossonParr Rosson
Professor & DirectorProfessor & Director
Center for North American StudiesCenter for North American Studies
Texas A&M UniversityTexas A&M University
CNAS
Animal Disease ImplicationsAnimal Disease Implications
Disruption of Trade FlowsImpacts on Prices, MarketsImpacts on Market Integration
CNAS
BackgroundBackgroundSince Mid 1980s, Market Integration in
North America Has AcceleratedExports/ImportsForeign Direct Investment
Animals & Meat Trade Among Fastest Growing Components
Discovery of BSE, FMD, Exotic Newcastle, Avian Flu Have All Disrupted Trade
Market Integration Has Outpaced Regulatory Integration
Regionalization Allows Trade to ResumeCNAS
World Meat Trade
Source: ERS/USDA1970 1975 1980 1985 1990 1995
20002004 (Jan-May)
0
1
2
3
4
5
6
7Million Metric Tons
Broiler Meat
Beef
Pork
U.S. Meat Exports, 1970-May 2004
Source: ERS/USDA 2004
1970 1975 1980 1985 1990 1995 20002004 (Jan-May)
0
500
1,000
1,500
2,000
2,500
3,0001,000 Metric Tons
Broiler Meat
Beef
Pork
BSE Boost
BSE Decline
Russian Ban
U.S. Broiler Prices, 12 Market Avg.
54.7
51.8
57.5
55.3
55.7
56.3
61.2
58.8
63.0
58.1
55.9
58.4
55.5
63.0
77.3
1990 1995 2000 2004 (Jan-July)50.0
60.0
70.0
80.0Cents/Pound
Asia/Canada High Path. Outbreaks
U.S. Imports of Beef and Pork
209 194 184 191 217266
321 325367
401 382
715642
641
734 823
880945
987 987
898
1026
1995 2000 2004 F0
200
400
600
800
1000
12001,000 Metric Tons
Beef Pork
U.S. Cattle and Hog Imports from Canada
Source: USDA/FAS
0.8 0.9
1.7
2.83.2
4.1 4.1 4.4
5.35.7
7.4
1.2 1.0 1.11.5 1.4 1.3
1.0 1.01.3
1.7
0.5
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 20030.0
2.0
4.0
6.0
8.0
10.0
Million Head
Hogs Cattle No Cattle Imports in 2004
U.S. Beef Exports, 2003
Source: ERS/USDA
Canada10.0%
Mexico19.0%
Korea24.0%
Japan37.0%
Other10.0%
4 Markets, 90%4 Markets, 90%
CNAS
U.S. Pork Exports, 2003
Source: ERS/USDA
Japan55.0%
Mexico16.0%
Korea5.0%
Canada13.0%
Taiwan2.0%
Other9.0%
3 Markets, 84%3 Markets, 84%
CNAS
U.S. Broiler Meat Exports, 2003
Source: ERS/USDA
Canada11%
Mexico8%
Turkey3%Russia
27%
China5%
Korea3%
Hong Kong7%
Cuba3%
Other33%
5 Markets, 58%5 Markets, 58%
CNAS
Integration in the North American Cattle and Beef Industry, 2002
$301 Million, 816,000 Head of Beef Cattle$23 Million, 6,000 Metric Tons of Beef
$283 Million, 76,000 Metric Tons of Beef
$75 Million, 105,000 Head of Beef Cattle$592 Million, 206,000 Metric Tons of Beef
$50 Million, 134,000 Head of Beef Cattle$218 Million, 67,000 Metric Tons of Beef
$1.1 Billion, 1.7 Million Head of Beef Cattle$1.1 Billion, 392,000 Metric Tons of Beef
Integration in the North American Cattle and Beef Industry, 2003
$470 Million, 1.2 Million Head of Beef Cattle$34 Million, 6,700 Metric Tons of Beef
$70 Million, 20,000 Metric Tons of Beef
$23 Million, 24,000 Head of Beef Cattle$606 Million, 193,000 Metric Tons of Beef
$30 Million, 68,000 Head of Beef Cattle$321 Million, 81,000 Metric Tons of Beef
$396 Million, 512,000 Head of Beef Cattle$850 Million, 256,000 Metric Tons of Beef
CNAS
U.S. Food Food and Kindred Industry Investment in Canada, Mexico, and World Total
Source: Bureau of Economic Analysis, U.S. Department of Commerce
$1.7
$2.5
$3.2
$4.0$4.3
$5.0
$5.8$5.5
$4.6
$0.5
$1.1$1.4
$2.7
$3.6
$4.7
$3.8
$4.4 $4.5
$9.3
$15.6
$21.1
$24.9
$31.0
$35.3$34.2
$35.9 $35.5
1985 1990 1992 1994 1996 1998 1999 2000 2001$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0Billion Dollars
$0.0
$10.0
$20.0
$30.0
$40.0Total SIC Canada SIC Mexico SIC
Mad Cows & Other Mad Cows & Other Monsters!!Monsters!!
European Commission Estimates of BSE Impacts on Beef Use & Prices
Financial Times, 1/15 and 1/30 2001.
-37% -35%
-50% -50%
-27%
-80%
-36%
-50%
France Italy Greece Germany EU
0%
20%
-20%
-40%
-60%
-80%
-100%
Percent Change, Oct. 1-Dec. 31, 2000
Consumption Beef Prices
UK
-40%
-25%
Canadian Beef/Cattle Trade Canadian Beef/Cattle Trade SituationSituation
60-65% of Beef Production Exported90-95% of Beef Exports to U.S. MarketNearly All Cattle Exports to U.S. MarketHighly Export Dependent, Extremely
Dependent on United StatesBSE Having Major Impacts on Canadian
Beef/Cattle Industry
CNAS
Alberta Direct Sale Steer Prices
Source: Alberta Agriculture, Food and Rural Development, www.agric.gov.ab.ca
Jan-02
Mar-02
Jul -02
Jan-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Nov-03
Feb-04
Jun-04
$30
$50
$70
$90
$110
CN$/CWT
$106.0
$88.3
$41.5$36.2
$84.0
$107.0
$115.0
$70.8
$113.0
$77.4$75.0
Mid-month Average Prices
BSE (5/20/2003)
Canadian Beef Exports to US Market, Jan-Apr 1989-2004
1989 1995 2000 20040
20
40
60
80
100
120
140
Actual Trend
1,000 Tons
Canadian Beef Exports to US Market
3127
24
1
72
90
101
111
2001 2002 2003 20040
20
40
60
80
100
120
140
Boneless Bone In
1,000 Tons (January-April)
Canadian Cattle Inventory
11.86
12.0
12.71
13.40 13.41 13.36 13.21 13.2013.61
13.76
13.49
14.66
1993 1995 2000 20048
10
12
14
16Million Head, January 1
USDA, ERS, PSD.
Alberta Direct Sale Steer Prices
Source: Alberta Agriculture, Food and Rural Development, www.agric.gov.ab.ca2001 prices are monthly averages, source CANFAX calculated by LMIC.
JanFeb
Mar
AprM
ayJun
JulAug
SepOct
NovDec
$20
$40
$60
$80
$100
$120CN$/CWT
2001 2002 2003 20042003
BSE
U.S. Trade SituationU.S. Trade SituationMeat Trade Fairly Concentrated-Top 3-4
Markets Represent Large Share of Trade– < 10% of Beef, Pork Exported– 17% of Poultry Meat Exported
Cattle Trade Limited to North AmericaU.S. Imports Feeder Calves from Mexico and
Fed Steers from CanadaU.S. Exports Feeder Calves to CanadaFor Each 1% Decline in Beef Supply, U.S.
Cattle Prices Rise 1.6%
CNAS
US Feeder Cattle Futures, Nov 03-Jan 04US Feeder Cattle Futures, Nov 03-Jan 04
BSE12/23/03
US Fed Cattle Futures, Nov 03-Jan 04US Fed Cattle Futures, Nov 03-Jan 04
BSE12/23/03
U.S. Beef Production & Demand Index
Source: USDA/FAS, www.fas.usda.gov/psd, LMIC
1980 1984 1988 1992 1996 2000 200421.0
22.0
23.0
24.0
25.0
26.0
27.0
28.0Billion Pounds
50.0
60.0
70.0
80.0
90.0
100.0
110.0
120.0Million Head/Index
Beef Production
Cattle Inventory
Retail Choice Beef Demand Index
95.8 94.9
Omaha Choice Steer Prices
1980 1985 1990 1995 2000 2004$40
$50
$60
$70
$80
$90
$100$/100 Pounds
Trend
$85.59
$10 Above Trend
$17 Above Average
Monthly Omaha Choice Steer Prices
J F M A M J J A S O N D$0
$20
$40
$60
$80
$100
$120$/100 Pounds
$105.50
$72.24
$91.95
2002
2003
2004
$76.73
$62.49
?
US Cattle Imports from Mexico
1970 1975 1980 1985 1990 1995 2000 2004F0
500
1000
1500
2000
1,000 Head1,653
1,360 F
Annual Avg. 800,000 Head
2004 is CNAS forecast
US Feeder Cattle Futures, May-Jul 04US Feeder Cattle Futures, May-Jul 04
Chicago Mercantile Exchange
US Fed Cattle Futures, May-Jul 04US Fed Cattle Futures, May-Jul 04
Chicago Mercantile Exchange
Cull Cows at Record Prices $55.64/cwt
SummarySummary
U.S. Meat Exports ConcentratedStrong U.S. Demand, Low Domestic
Production, Limited Imports of Canadian Cattle– Record High U.S. Cattle Prices
U.S. Pork Exports Have Gained As Beef & Poultry Exports Have Declined
CNAS
ImplicationsImplicationsDegree of Trade Dependence Determines
Potential Severity of Animal Disease Impacts
Maintaining Consumer Confidence Important
Strong U.S. Demand, Low Domestic Production, Limited Imports of Canadian Cattle– Record High U.S. Cattle Prices
U.S. Pork Exports Have Gained As Beef & Poultry Exports Have Declined CNAS
Center for North American StudiesCenter for North American Studies
Parr RossonParr Rosson
Ph: 979-845-3070Ph: 979-845-3070
E-mail: [email protected]: [email protected]
“Informed Decisions for Global Change”
CNAS
