Factors Shaping Meat Trade

In a report published by the U.S. Department of Agriculture, Economic Research Service, Factors Shaping Expanding U.S. Red Meat Trade, as a result of robust global income growth, expanding consumer demand for a broader range of products and product specialization induced by increased openness and integration of markets worldwide, the United States is exporting more of its red meat production, while at the same time importing more from other countries. More open trade has increased interdependence between livestock sectors of the United States and its major trading partners, enhancing the role played by factors such as increased incomes, more demanding consumer preferences, specialization in production, price differentials and exchange rates in shaping the meat trade and the returns to livestock producers.

Readers will find an interest in the discussion of monetary exchange rate influence on U.S. imports and exports of beef, pork, lamb and mutton. Despite fluctuations in the exchange rate index, lamb and mutton imports have historically trended upward, with a relatively steep increase after 1995. This increase was fueled by the strong U.S. currency, relative to the currencies of Australia and New Zealand, which pushed up the lamb index and made imported lamb less expensive to U.S. purchasers.

Because U.S. consumers prefer high-quality and high-value cuts, a large share of U.S. exports is lower-valued product.

As consumer incomes in foreign markets, particularly in emerging market economies, continue to grow, the trend of increasing trade in red meats-and increasing interdependence between U.S. and foreign markets-will likely continue.

The complete report can be accessed at www.ers.usda.gov/Publications/LDP/2009/02Feb/LDPM17501/.

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