US could fill ramped up EU no-hormone beef quota

US could fill ramped up EU no-hormone beef quota


Beef News
CLOSE CALL: US Rabobank animal protein analyst Don Close says no-hormone cattle production is growing in his country.

CLOSE CALL: US Rabobank animal protein analyst Don Close says no-hormone cattle production is growing in his country.

Aa

Angst grows over Australian beef's access to zero-tariff EU quota.

Aa

THERE is no question the United States could fill a ramped up European Union grainfed quota for no-hormone beef, experts say.

Angst is mounting about the possibility the EU may give the US a large, country-specific portion of the tariff-free grainfed quota which is extremely valuable to Australian suppliers.

The EU and the US now have the green light to negotiate changes to the 45,000t quota, known as 481, which is currently filled by the US, Australia, New Zealand, Uruguay and Argentina on a first-come, first-served basis.

Market chatter has as much as 35,000t being handed to the US and it seems despite being a system dominated by the use of hormone growth promotants, US beef production is gearing up to take full advantage.

US Rabobank animal protein analyst Don Close said the natural and non-hormone treated cattle program sectors in the US were both growing at a metered pace.

“A large share of the growth has been targeting product going to China and the growing demand for natural products in the States,” he said.

“But it hasn’t gone unnoticed the product that qualifies for China also qualifies for the EU.”

Tyson, Creekstone and Iowa Premium Beef were the leading packers in this space but Cargill was also on the scene, Mr Close reported.

“I am frequently surprised that there are more of them than I anticipated,” he said.

The EU 481 quota was “most certainly” a target market for the US industry, Mr Close said.

“And the barriers and non-trade barriers to the EU have always been a frustration to US cattle feeders and government trade negotiators,” he said.

“The bottom line, however, is that while the US beef industry most certainly would like to see more business with the EU, I think this is more of a negotiating chip than anything else.”

Alan Oxley, principal of consultants ITS Global and one of Australia's most authoritative advisers on international trade, said Australian beef suppliers should be very concerned about the developments with this quota.

However, it was unlikely they’d have much say, he said.

“Beef quotas are small and when the EU and US decide to do something different everyone else has to go with it,” he said.

“Beef in the EU has always a difficult issue.

“We were expecting to line up for better access, but clearly the EU has bigger fish to fry.”

His interpretation was the EU was trying to gain traction in other areas where the US has been exerting pressure, like steel tariffs and possibly auto exports.

“Agricultural rules have always been looser than the rest of system and that is something Australia has been fighting for years,” Mr Oxley said.

“But this is a valuable area of trade, so why should we surrender it? Beef is a big industry here that will be very sore about this if it goes ahead.”

Aa

From the front page

Sponsored by