US beef competes with Australia for rule of Japan’s market
At the annual Oregon Cattlemen’s Convention on 5 December, Halstrom gave an update on the state of US beef exports and stressed there were still valued opportunities to be had in the market.
However, Halstrom made little attempt to sugar-coat the uphill battle and strong headwinds cattle producers face in tapping into the lucrative Asian market.
“We have been under intense competition with Australia, in particular in the Asian markets,” said Halstrom.
“Part of it is that they [Australia] have about a 10% duty advantage over us because they have a bilateral agreement [in place] with Japan."
'All-time record'
Last year the US averaged approximately $300 per head of cattle which was an “all-time record” according to USMEF data presented by Halstrom.
Despite a strong 2014, American beef exporters are paying about 38.5% export duty. This is a significantly higher rate than Australia, which enjoys a 29-30% rate thanks to the Japan-Australia Economic Partnership Agreement (JAEPA).
Last year, beef was Australia’s fourth-most exported product to Japan, worth around AU$1.65bn, according to the Australian Department of Foreign Affairs and Trade (DEFAT).
TPP 'key'
The key to combating Australia’s superiority in Japan is the quick administration of the Trans-Pacific Partnership (TPP) agreement, according to Halstrom.
“Once we get TPP administered, and at the point that it becomes effective, we will be on par with Australia immediately… I heighten from our point of view that TPP is a very vital piece of legislation to remain competitive,” he said.
The price per head for US beef exports dropped slightly to $280, according to USMEF data. And despite Australia’s firm grip on Japan, the Asian state remains America’s top market for beef exports, generating approximately $809m in the first nine months of 2015, according to USMEF’s global report.
