JUST how aggressively the slick United States beef trade will target high-end Asian markets important to Australia, as it seeks a lucrative home for its ramped up production, is starting to garner serious attention.
Whether the US will be able to negotiate better trade deals is a key concern.
US beef exports in the first quarter of this financial year were the largest in close to two decades and were largely underpinned by big jumps in volumes to Japan and Korea.
The US has also just negotiated access to China for the first time since it was banned 14 years ago due to a mad cow outbreak.
The new arrangements kick in from mid-next month but the implementation process is still not clear, given the use of hormone growth promotants (HGPs) is still to be nutted out in protocol negotiations.
The majority of US cattle are treated with HGPs.
US beef leaders are making no secret of how important they consider China, Korea and Japan and the fact they are pushing their government hard to prioritise improved market access.
Deputy chief economist with the US Department of Agriculture, Warren Preston, said exports were of great importance to the US beef sector.
“On a carcase basis, beef exports have increased from six per cent of US beef production in the early 1990s to over 10pc in 2016,” he said.
“The growth in exports is tied in part to increased economic development in the world, but also to increased access to a number of markets, including Japan and South Korea.”
The belief is further gains can be made in improved access to these markets, he said.
US beef exporters were always on the lookout for opportunities to expand sales.
While Japan and Korea were the two largest customers of US beef last year, the sector was not “resting on its laurels” and focusing on increasing sales to only those markets, Mr Preston said.
It continues to work diligently to increase sales in markets throughout the world, he said.
“Obviously, a level playing field is highly important to increasing our share in high-end beef markets,” he said.
“The US has a strong advantage in producing high-quality, well-marbled beef through its mix of grass and grain feeding systems and is well situated to compete on a quality basis.
“Since high-quality beef commands a higher price, economic growth in importing countries is an important component of expanding trade.
“However, the relative value of the US dollar vis-à-vis those of importers, as well as competitors, affects our ability to compete in these markets.”
Increasing awareness of the virtues of US beef through marketing efforts would also be an important component of the US’s ability to build market share, he said.
As to whether the US would be in a better position than Australia to secure improved trade deals for beef, Mr Preston said trade negotiations were a “give-and-take” exercise and each country has its own strengths and strategies to bring to the table.
“Regardless, lowering trade barriers – be they tariff barriers, non-tariff barriers, or expectations that sanitary requirements be based on sound science – can benefit the cattle and beef sectors in both of our countries by showing what is possible through the negotiating process,” he said.
Agricultural economist with Kansas State University, Ted Schroeder, said the domestic US beef market was mature.
“The best opportunities for demand growth for US beef is in countries with growing income and large population bases that are adopting more beef in their diets and high quality beef is likely to become a larger part of that diet,” he said.
Mr Schroeder said China, Korea and Japan were significant targets.
“Certainly Mexico, Canada and Europe remain targets as well as others,” he said.
There were two major things that would be key to the US being able to secure increased market share in high end beef markets.
“One is developing consumer preferences for high quality beef,” Mr Schroeder said.
“Two – political stability and stable political relations and this has probably been the biggest challenge for the US since 2003.
“Because the US imports so much other product from places such as China, we may have a little more leverage to encourage them to import our products that include beef.”