WASHINGTON/CANBERRA/CHICAGO: President Donald Trump said the US will sell "so much" beef to Australia after Canberra relaxed import restrictions on Thursday(July 24), but economists and traders said high prices and tight supplies make major American exports unlikely.
Australia said it would loosen biosecurity rules for US beef. The move will not significantly increase US shipments, though, because Australia is a major beef producer and exporter whose prices are much lower, analysts said.
US companies export small quantities of beef to Australian buyers. They import much more in the form of lean beef used to make hamburgers, particularly as US production has declined because of tight cattle supplies.
US beef prices set records this year after ranchers slashed their herds due to drought that burned up pasturelands used for grazing. The total herd size fell to 94.2 million head as of July 1, a record low for that date, according to US Department of Agriculture data on Friday.
A ban on cattle imports from Mexico because of New World screwworm, a devastating livestock pest, and steep tariffs on Brazilian beef that are set to take effect on Aug. 1 could further tighten meat supplies, and require additional imports of Australian beef.
"We can't get enough beef in the US right now, so we're bringing it in from Australia and Brazil," said Dan Norcini, an independent US livestock trader. "We're not going to be selling anything significant to anyone."
Last year, Australia shipped almost 400,000 metric tonnes of beef worth US$2.9 billion to the United States, with just 269 tonnes of US product moving the other way. "They have more cattle than people," said David Anderson, an agricultural economist at Texas A&M University. "That's why they export so much."
US and Australian beef also taste different.
Many Australians like the grass-fed beef raised there, not marbled beef from US-raised cattle that are generally fed with grain, said Jerry Klassen, chief analyst for Resilient Capital in Winnipeg. He predicted the United States will not export substantial amounts of beef to Australia in the next five years.
"We just aren't in a position to export much beef to anyone, and the reality is Australia doesn't really have much need for US beef," said Karl Setzer, partner at Consus Ag.
The barriers that remain to exporting significant volumes of US beef to Australia appeared to be lost on Trump this week. "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," Trump said in a post on Truth Social. "The other Countries that refuse our magnificent Beef are ON NOTICE."
Trump has attempted to renegotiate trade deals with numerous countries he says have taken advantage of the United States, a characterisation many economists dispute.
"For decades, Australia imposed unjustified barriers on US beef," US Trade Representative Jamieson Greer said in a statement, calling Australia's decision a "major milestone in lowering trade barriers and securing market access for US farmers and ranchers."
Australian officials say the relaxation of restrictions was not part of any trade negotiations but the result of a years-long assessment of US biosecurity practices. Canberra has restricted US beef imports since 2003 due to concerns about bovine spongiform encephalopathy, or mad cow disease. Since 2019, it has allowed in meat from animals born, raised and slaughtered in the US but few suppliers were able to prove that their cattle had not been in Canada and Mexico. The US sources some of its feeder cattle from the two neighbouring countries.
On Wednesday, Australia's agriculture ministry said US cattle traceability and control systems had improved enough that Australia could accept beef from cattle born in Canada or Mexico and slaughtered in the United States.
The decision has caused some concern in Australia, where biosecurity is seen as essential to prevent diseases and pests from ravaging the farm sector.
"We need to know if (the government) is sacrificing our high biosecurity standards just so Prime Minister Anthony Albanese can obtain a meeting with US President Donald Trump," shadow agriculture minister David Littleproud said in a statement.
Australia faces a 10 per cent across-the-board US tariff, as well 50 per cent tariffs on steel and aluminium. Trump has also threatened to impose a 200 per cent tariff on pharmaceuticals.
Asked whether the change would help achieve a trade deal, Australian Trade Minister Don Farrell said: "I'm not too sure."
"We haven't done this in order to entice the Americans into a trade agreement," he said. "We think that they should do that anyway." - Reuters
