YESTERDAY’S Federal Government announcement that United States beef will again be eligible for export to Australia after a 22-year absence is more about symbolism and political expediency than any serious attempt at expanding US beef trade.

US beef has not been seen on these shores since the ban was imposed during 2003 after BSE was discovered in the US beef herd.

The difference this time around, of course, is that it will also include beef processed in the US from cattle bred in Canada or Mexico. Evidently, according to the agreement that’s been reached, all of it will carry equivalency, in terms of whole-of-life traceability, like Australia’s.

Now that the deal has been signed, sealed and delivered, first shipments (if they are to arrive at all) are unlikely to clear Australian Customs before about mid-October, trade sources suggested this morning. The only exception to that would occur if somebody tries to grandstand the process and capture attention by bringing in some air freight shipments.

But how likely is it that any US beef trade will take place into Australia at all, given that the US beef herd is at 60-year lows, and US beef prices are at blistering record highs?

Consider the following: In Aussie dollar terms US grainfed cattle are this week $1600 a head more expensive than Australian equivalents, and even with an Australian Angus feeder price at 510c/kg today, US equivalent feeder cattle are currently A$2100 a head more expensive. At the same time, US fed and non-fed slaughter is plummeting to levels not seen in more than a decade.

Given that, there’s only two reasons why even small quantities of US beef will appear in Australia at all.

The first is about symbolism, rather than serious commercial trade. Australia has some of the highest biosecurity standards in the world, and landing even a few containers of US product into Sydney or Brisbane ports potentially has value far beyond the boxes of meat they contain. It adds cache and credibility to the reputation of US beef in world markets in general. Trump’s statement following yesterday’s announcement (published in full below) said it all:  “Now, we are going to sell so much to Australia because this is undeniable and irrefutable proof that US Beef is the Safest and Best in the entire World.”

That comment belies the fact that US chilled beef shelf-life performance is often only a fraction of Australia’s.

The second reason is ‘novelty’ value. It’s almost inevitable that given that US fresh beef has not been seen on these shores for 23 years, a few marketing-savvy steakhouse proprietors across the country will hang out blackboards appealing to diners to “Come in and try an Omaha grainfed steak.”

But once the wholesalers’ first bills for that product come in, and they realise they can procure an Australian grainfed steak of identical eating quality for two-thirds of the price, that’s likely to rapidly change, wholesale trade sources suggested this morning.

Beef Central has clear recollections of Tyson US grainfed rumps being sold in Australian retail outlets for brief periods in the early 2000s, before the BSE ban was imposed. Those occasions were very rare, and only short-lived.

They showed that in essence, three things needed to align to make US imported beef anywhere near price-competitive in the Australian market:

• The first is a US beef herd size and production volume at the absolute top of the cycle, leaving spare product that needs to be disposed of in other markets
• The second is an Australian herd size and production level in post-drought recovery mode, when product is extremely tight, and
• The third is an Aussie dollar close to parity with the US greenback, so that currency does not erode any attraction in sending product into Australia. The Aussie today is a lot closer to US50c than US$1 in value, sitting this morning at US65.6c.

Trade sources this morning suggested that the first consignments of US beef to Australia are likely to be high-end USDA Prime loin cuts, marbling scores 4-5, targeted at higher-end steakhouses and restaurants. They said it was unlikely that more ‘commodity’ grainfed (USDA Choice or Select) product would be consigned, given pricing differences.

Eligibility questions remain

A number of important questions remain about the eligibility of US beef for export to Australia.

A good example is US cattle treated with the powerful growth promotant family called beta agonists. Beta agonists are widely used in the US grainfed beef industry, but have never been approved for use in Australian beef.

Industry groups agreed with Beef Central that if beta agonist-treated US beef is permitted for export to Australia under the terms of the new agreement, it would create an enormous anomaly, putting Australian grainfed beef production at a considerable competitive disadvantage.

Australia does not currently have a Maximum Residue Limit for zilpateraol (one of the compounds used under the beta agonist group). What this means for ‘detectable’ levels’ of zilpaterol in any future US beef imports is not yet clear. We may look into this beta agonist issue in greater detail next week.

US Meat Exporters offer comment

The US Meat Export Federation noted the market access change to Australia in messaging to members overnight.

It said the Australian Department of Agriculture, Fisheries and Forestry decision provided ‘meaningful access’ to Australia for the first time since the market closed in response to the December 2003 BSE case.

US Agriculture Secretary Brooke Rollins issued a statement in response to the announcement, noting, “It’s absurd that non-scientific trade barriers prevented our beef from being sold to consumers in Australia for the last 20 years.”

US MEF noted that reaction within Australia had been mixed, with some industry organisations – including Meat & Livestock Australia and the Australian Lot Feeders Association – acknowledging the importance of free trade and the need for a major beef exporting nation to abide by science-based principles.

“Other (Australian) industry associations continue to resist the market opening, despite the fact that BSE-related restrictions have been lifted by most countries throughout the world,” it said.

While Australia would be a niche market for US beef – with opportunities expected to be mostly in the foodservice sector – the market opening was still an important development, MEF said.

“As an FTA partner, Australian beef has enjoyed favorable access to the US market for many years, and the US is Australia’s largest beef export destination. Australia’s acceptance of US beef, with full access and no restrictions, is long overdue,” it said.

Trade statistics need clarification

Some of the statistics published since the yesterday’s announcement have given some distorted impressions about the extent of ‘beef trade’ out of the US into Australia over the years, and especially since 2003.

Some of the tonnages quoted include not only chilled and frozen (ie fresh) beef shipments, but processed items (think jerky or tinned Stagg chilli, ingredients for which have had the religion cooked out of them, produced by US food giant Hormel, which has been a Australian uni student food staple for decades).

In practical terms, processed meat trade items like this has little or nothing to do with the trade access matters that developed yesterday.

The figure that matters is fresh beef (chilled or frozen), where import statistics show shipment volume averaged only an insignificant 23 tonnes per year, over the 20 years up to 2003 when the Australian market was shut due to US BSE cases. Since then, trade in chilled/frozen fresh beef has been zero, while processed US meat products (eg tinned Stagg Chili) has continued to come into Australia.

Broader biosecurity implications?

Yesterday’s announcement has much broader implications for Australia than just beef, some large protein stakeholders have suggested, branding the Federal Government’s move as a short-sighted grab for political expediency.

Some animal protein stakeholders fear the move could easily become a catalyst, and precedent,  not only for US chicken and pork imports to this country, but potentially, beef and other imports from other regions, including Brazil.

“It isa very short-sighted, and opens a can of worms,” one contact said.

Australia is already engaged in a court action over a biosecurity risk assessment decision on Chilean salmon imports, that has dragged on for months. Evidently there are genuine concerns held over biosecurity risks associated with the importation of Chilean salmon.

Trump’s response

On his Truth Social account, USD president Donald Trump said yesterday:

After many years Australia has agreed to accept American Beef! For a long time, and even though we are great friends, they actually banned our Beef. Now, we are going to sell so much to Australia because this is undeniable and irrefutable proof that U.S. Beef is the Safest and Best in the entire World. The other Countries that refuse our magnificent Beef are ON NOTICE. All of our Nation’s Ranchers, who are some of the hardest working and most wonderful people, are smiling today, which means I am smiling too. Let’s keep the Hot Streak going. IT’S THE GOLDEN AGE OF AMERICA!

MLA has issued this summary on yesterday’s announcement.