All eyes on the US herd rebuild

All eyes on the US herd rebuild


Beef
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Developments in what is both one of Australian beef’s biggest markets and biggest competitors – the United States – has dictated much of the 2017 story in the international market space.

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Australian beef exports to the US continue to be challenged by rising US  production.

Australian beef exports to the US continue to be challenged by rising US production.

DEVELOPMENTS in what is both one of Australian beef’s biggest markets and biggest competitors – the United States – has dictated much of the 2017 story in the international market space.

Increased US production has come courtesy of a herd rebuild driven by growth in domestic consumption and exports, along with attractive feed prices.

The extra US beef in the system will have many implications. Firstly, less demand for lean trimmings from Australia.

Secondly, just how aggressively will the US target high end Asian markets important to Australia as it seeks a lucrative home for its ramped up production?

And will the US will be able to negotiate better trade deals?

The US this year regained access to China for the first time since it was banned 14 years ago due to a mad cow outbreak.

US economists visiting Australia this year told Fairfax Media: “Our target in China will be high quality, we’ll play on a very small segment.”

That adds up to aggressive competition for our exporters.

Increasing tariffs on US frozen beef exports to Japan, from 38.5 per cent to 50pc until March next year, should deliver a solid competitive advantage for Australia in one of the few markets where we actually recorded growth in the value of shipments during 2017.

In July, a climbing Australian dollar exacerbated declining US cattle prices. The dollar hit a two-year record.

Beef industry leaders have also been active during the year on the European front, making sure Australia’s case for improved market access in the wake of Brexit is heard loudly and clearly.

The European Union has a highly restrictive import regime punctuated by low volume import quotas and high out-of-quota tariffs, in stark contrast to the majority of Australia’s other export markets.

Industry leaders said the United Kingdom’s vote to leave the EU presented a “once in a lifetime opportunity to correct the inequities” Australian exporters have faced in the region.

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