Strong Australian beef exports to US set to trigger quota allocation system

Australian Minister for Agriculture, Barnaby Joyce, has noted that above-average beef exports from Australia to the United States (US) could trigger the quota allocation system for the first time under the current beef export arrangements to the US market.

The US, while a leading beef producer and exporter of around 11 million tonnes annual production and 1.2 million tonnes in exports in 2014, administers much of its nearly one million tonnes of beef imports (2014) through the WTO Uruguay Round or FTA quotas.

Australia has access to the US beef market through a duty-free country-specific quota of 378,214 tonnes, allocated under the 1995 multilateral Uruguay Round Agreement on Agriculture, plus an additional duty-free quota under the Australia-US Free Trade Agreement (AUSFTA), which reached 40,000 tonnes in 2015, giving Australia a total duty-free quota of 418,214 tonnes for 2015.

Minister Joyce said Australia’s lucrative US beef quota was of major importance to the beef industry, and it was pleasing to see such strong exports to this key market.

“The US became our largest beef export market in 2014—worth $2.44 billion, or around 32 per cent of our total beef exports,” Minister Joyce said.

“It is great to see our producers capitalising so effectively on opportunities in overseas markets, delivering real returns at the farmgate and for our nation’s economy.

“Although we are halfway through the quota year, current strong exports mean we have already reached more than 55 per cent of our 418,214 tonne quota for beef exports to the US.

“If exports continue at the current rate, we could see the quota allocation system triggered for the first time under the current arrangements for beef exports to the US.

“The Department of Agriculture will work to ensure exporters have advance notice if the quota allocation system is expected to be activated, including information on how to participate in the allocation process.”

Minister Joyce said the quota allocation system would be triggered if Australia reaches 85 per cent of its US beef export quota before 1 October. At the current rate of usage this could occur by mid-August.

If this occurs, the remaining 15 per cent of the quota would change from being first-come first-served to being allocated proportionally, based on the exporter’s record of shipment.

Once usage of the quota reaches 65 per cent, which could be in late July at current usage rates, the department will contact exporters to start the process. Usage levels are updated twice a week on the department’s website.

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