Tariff rate quota reform around red meat will mean some significant changes in our markets, particularly for beef’s efforts to target high value markets.
As we go further down the free trade path, the message that trade has to be a two-way street has become a reality in the beef space.
This means not just growth in red meat imports, but also an increasing importance on how we jostle to maintain our export markets – especially the most lucrative.
In June this year, Japan was the first country to get the green light to export to our shores. This has so far been mainly for the fancy, high-end stuff, where the rich want to impress their friends or clients with a $100-plus steak.
Therefore, most of us haven’t noticed.
The US is the next in line, and will most likely sail through, as it previously had approval to export to Australia in the early 2000s.
Back then, that was also high-end product. A big difference this time around could be the increased market share of US-owned processing and retail companies, such as Costco, which may choose to seek out certain US products that could displace local product in the domestic market.
Related reading: As Australia signs more free trade agreements, tariff agreements and beef imports have come into question, and there's now a line-up of countries seeking approval to export to our shores
The next two countries in line are Vanuatu and The Netherlands. The latter is particularly interesting as it plays the same clean, green and traceable cards that we do.
The reality, it seems, is that the world is saying if you want us to keep taking your beef, you need to buy some back.
It is therefore more pertinent than ever that we are ahead of the curve in identifying consumer trends so we can capture the high-end markets to balance that trade.
We also must keep our health and quality status. While we have some of the strictest quarantine rules in the world, it is now more important than ever that our governments and bureaucracies ramp up the effectiveness and resourcing of our quarantine services.
Other countries will try and chip away at our quarantine.
However, we have the privilege of isolation and have hung our hat on our health and quality status.
This is one area in which we can really be proactive and is also critical to us in maintaining our own high-end markets.
Ultimately, profitability will dictate a lot of how our market share levels out, but we need to make sure we’re not squeezed from the high value markets and left solely to compete against the low-cost producers.