Imports are set to account for an increased share of the US beef supply in 2015, according to Karen Coyle, of Bord Bia’s North American Office.
As the largest beef market in the world, she says there is always a myriad of supply and demand dynamics at play in the US market.
“But certainly no more so than at present, as current international developments have significant short and long-term impact on America’s beef import and export trade.
“On the importation side, it is increasingly likely that both Australia and New Zealand, the number one and two sources of imported beef into the US, will exceed their US importation quota for the first time in over a decade, she said.
According to Coyle as of October 8, reports suggested that Australia’s beef quota fill rate was at almost 91% (up from 86% one week ago), while New Zealand has filled almost 88% of its US quota (up from 85% last week).
However, she said Australia has an additional 40,000MT they can access under their FTA, and adding this to their quota reduces their current fill rate to just over 82%.
Colye also cited Rabobank’s most recent Beef Quarterly report which notes that as outside-quota beef incurs a 21%-26% discretionary tariff, which they don’t see the US trade paying for, it is likely that both countries will slow down shipments to the US until the quota resets in January and, in the meantime, re-divert to growing markets such as China, Japan and Korea.
The USDA ERS (Economic Research Service) livestock and meat trade data released in September showed a 32% increase in beef imports to the US year to date versus the same period in 2014.
Coyle said this supports a general view that imports will account for approximately 14% of the US supply of beef in 2015, up from 12% in 2014.