Australia and New Zealand Send Less Beef to U.S.

From January through May, U.S. beef imports continue to expand beyond the record pace set in 2004. Although Australian and New Zealand imports are down from 2004, imports from Uruguay are increasing at a staggering pace — even though about 95 percent of Uruguay’s exports to the U.S. are assessed the 26.4 percent over-quota tariff rate.

Lean and cooked beef imports through May are virtually identical to the same time in 2004, with the main difference being a 24,000 metric ton (17 percent) increase in beef imports from Canada due to its increased slaughter capacity.

Total U.S. Imports

Major U.S. suppliers continue to be Australia, Canada and New Zealand. These three countries accounted for approximately 79 percent of the volume and 80 percent of the value of beef imported in 2004.

Lean beef imports from Uruguay remain the big story again in 2005. Most of this product is price competitive even after it is assessed the  out-of-quota tariff.

Imports from New Zealand are down as result of its dairy cattle cycle and the related decreases in production.  Roughly two-thirds of New Zealand’s beef is from dairy cattle.

U.S. imports from Australia are declining because Australia is focused on supplying beef to South Korea and Japan in the absence of a U.S. presence in those markets.

Imports from TRQ suppliers

Total January-through-July 2005 U.S. beef imports from primary tariff rate quota suppliers were down 5 percent compared to the same time in 2004.

U.S. beef imports from Australia, New Zealand, Argentina, Uruguay and "all others" are subject to tariff rate quotas as negotiated in the WTO Uruguay Round.  Under the WTO Most Favored Nation tariff rate quota, suppliers must pay a 4.4 cents/kg. in-quota tariff. Any product shipped after the tariff rate quota is filled is assessed a U.S. tariff of 26.4 percent. Historically, exporting countries rarely fill their beef tariff rate quotas.

Canada

Canada’s packing capacity has increased by more than 10,000 head per week during the past year, evidenced by Canada’s beef exports to the United States. Canada is now capable of slaughtering approximately 90,000 head per week and has a goal of processing 110,000 head (fed and non-fed slaughter) per week by year’s end. During May 2005, total Canadian slaughter reached about 88,000 head per week, which was about 15,000 head per week greater than in May of 2004.

Australia

The United States imports mostly lean beef for manufacturing from Australia, which is then blended with U.S. trimmings to create quick-service hamburgers. Australia last filled its tariff rate quota for fresh/chilled and frozen beef in 2001. Australia came close again in 2004, with an export volume that filled 97.68 percent of its quota.

The U.S.-Australia free trade agreement was implemented in January 2005, providing increased U.S. market access for Australia under a separate quota for manufacturing beef. Still, Australia will export less beef to the United States in 2005.

New Zealand

The United States imports mostly lean beef from New Zealand as well. New Zealand nearly filled its tariff rate quota the last two years. New Zealand year-to-date exports are down.

Argentina

Argentina remains ineligible to ship fresh or frozen beef to the United States because the country has not maintained FMD-free (foot-and-mouth disease) status after a March 2000 outbreak. The United States did not import any fresh or frozen beef products from Argentina in 2004, but Argentina’s shipments of cooked, canned and preserved product are up 30 percent in 2005. Again, cooked and processed beef may be shipped without quota restrictions.