BRAZIL and a group of other smaller exporter countries servicing the US export beef market under the US’s ‘Other Country’ beef quota have in recent days filled their tariff-free entitlement for the 2024 year.

It means that in order to continue to service the US beef market for the remainder of 2024, Brazil and several others will have to pay an out-of-quota tariff of 26.4 percent on all beef shipments, reducing their competitiveness against other exporters like Australia and New Zealand.

As can be seen in the graph above, the 2024 ‘Other Country’ US beef quota was officially filled on 27 February, reflecting the growing demand for imported Brazilian beef in the US market, where domestic production is now in sharp decline. In comparison, last year the quota was filled on May 2, and the year before that, on March 28.

Brazil began exporting beef to the US market in 2017, but sanitary concerns resulted in Brazil losing access from 2018 to May 2020. After detecting a case of atypical BSE in September 2021, Brazil lost access to its primary market, China, and shifted its export focus at the time to the US.

Brazil is easily the largest beef exporter operating under the US ‘Other Countries’ quota, regularly occupying more than 90 percent of the TRQ.

Currently, 17 countries are eligible to export fresh and frozen beef to the US. They include Argentina, Australia, Brazil, Canada, Chile, Costa Rica, the Dominican Republic, France, Ireland, Japan, Mexico, Namibia, Netherlands, New Zealand, Nicaragua, the United Kingdom, and Uruguay.

Four of those – Australia, New Zealand, Argentina and Uruguay – operate under their own independent Tariff Rate Quotas (TRQs), with the rest functioning under the ‘Other Country’ TRQ.

Brazil’s access to the US under the ‘Other Country’ quota totals just 65,005 tonnes. In comparison Australia operates under its own individual US quota – this year sitting at 448,214t, meaning it is unlikely to be filled in the foreseeable future.

Argentina and Uruguay each have their own small US quotas, each of 20,000t, while New Zealand has a 213,000t US quota this year.

Historically Australian lean 90CL frozen trim has traded in the US market at around a US20-30c/lb premium over equivalent Brazilian meat, but starting last year, the difference has declined.

Some of that may be due to more US customers and end-users becoming more ‘accustomed’ to using Brazilian product.

“Much like what we saw last year, it’s likely we will continue to see Brazilian beef drift into the US market – even with the extra tariff burden,” an export beef trade contact told Beef Central.

“There will be certain big exporters in South America who might have a plant or two that aren’t China-approved, where the US is still their best option – even with a tariff burden. And adding to that, China has not been the brightest market recently, either.”

“It’s been hard to sell export meat, full stop. Global economic slowdown and financial pressures are being seen everywhere.”