Australia Hikes Checkoff Fee to Defend Export Markets

U.S. cattlemen will have a little tougher competition when the ban on U.S. beef is finally lifted in Japan and South Korea.  Australian cattlemen are looking to protect the market share they gained in the absence of U.S. and Canadian beef in those Asian countries due to BSE beef bans. 

Beginning Jan. 1, Australia's estimated 70,000 beef producers will see their checkoff increase by $1.50 per head to $5. This is the first increase since 1994.  Since then, it is estimated that the buying power of those funds has lost 31 percent.

With the United States out of the Japanese market, Australia says it has increased its exports there by 41 percent in 2004, despite lower Japanese consumption due to BSE concerns.  Australia now owns 90 percent of the Japanese beef import market. 

A steering committee in favor of the increase said it was needed to develop new markets or possibly face an unfavorable supply/demand situation by 2009 that could reduce cattle prices by 15 percent.  The committee also cited emerging competitors in world beef production, such as Brazil.

The checkoff increase was approved by the government and a vote by producers. Under their voting procedures, 12 million votes were cast, with 58 percent in favor of the checkoff hike.  The number of votes was 250 percent more than any other similar beef initiative.

The checkoff increase will remain in place through 2010.