The European Union could soon allow beef carcases to be treated with lactic acid, an anti-microbial measure widely used in the US processing industry that has up to now limited the US in its capacity to service the growing EU grainfed beef market.

EU member states are reported to be moving towards authorising use of mild acid washes on carcases in slaughterhouses, with labelling to inform EU consumers that the meat was treated with the compound.

The US Department of Agriculture has previously stated that filling its high quality beef quota would depend on EU approval of lactic acid washes, which are commonly used to decontaminate carcases in the US, where bacterial contamination is a much greater problem than it is in Australia.

In 2009 the EU and US established a Memorandum of Understanding that allowed the EU to maintain its ban on exports derived from HGP-treated animals, while raising its import quota for non-treated US beef. The US removed all retaliatory sanctions against the EU ban 13 months ahead of schedule last July, meaning Brussels must now up its grainfed quota for imports from eligible countries (including the US and Australia), from 20,000 to 45,000 tonnes by August this year.

Agreement to the permit the use of lactic acid as a decontaminant will substantially increase US ability to meet quota requirements, analysts say.

Meanwhile Australian beef exports to the EU started 2012 on a positive note, with exports for January totalling 520t, an increase of 64pc on the same period last year. Highlighting the fast start to the year, exports for January were also 123pc above the five-year average to the EU market and were the highest January total since 1999.

However, volumes were back almost half compared to the previous month, with December 2011 volumes reaching 1098t. Contributing to the decline in shipments from December was the reduced availability of product, with many processors undertaking annual closures throughout January.

In sharp contrast with grass and grainfed beef quotas, recent figures from the European Commission indicate that Australia used 99pc of its EU sheep meat quota in 2011.

Australia exported 19,025t of lamb out of a possible the 19,186t allocated under the country-specific quota.

New Zealand fell well short of achieving full utilisation of import quota allocation for the second year running. Total exports from NZ were 181,715t, well shy of its 227,854t allocation.

The growing importance of other markets and weather and other production challenges in NZ have severely affected shipments of NZ lamb and mutton to the EU.

Other suppliers of sheepmeat to the EU struggled to reach their quota allocations, with declining production resulting in lower quota usage. Australia was the only supplier to come close to using its full quota allocation.