TPP and US Beef Exports

(Jamie) Welcome back to Farm Factor. We’ll end today with a look at how implementation of the Trans-Pacific Partnership represents a level playing field for US beef exports.
(Bob) Every day the Trans-Pacific Partnership waits for U.S. Congressional approval, is one more a day that Australian beef gains Japanese market share. That’s because tariffs on beef imported to Japan from The Land Down Under are currently more favorable. (Halstrom) This is very, very important to the beef industry in the U.S. because at the moment the TPP is finally implemented, we will be on a level playing field with Australia. That’s part of the agreement. The 10% disadvantage today which is growing every year would be put on a level playing field once TPP is implemented. We’re very much looking forward to that, hopefully sooner rather than later. (Bob) Halstrom shares a “round numbers” example of a $100,000 container of beef going into Japan. It would be at a $10,000 disadvantage to the one coming from Australia. (Halstrom) When we can get that inbound duty equal to Australia, we’re going to be even that much more competitive. Now granted, Australia is more grass fed, we’re grain fed. The quality differences are there. We’ve spent years working on that. Consumers in Japan know our quality difference and are willing to pay for it. My point is that $10,000 should be going into our pocket and it will be once TPP is implemented. This is huge. That’s one container out of thousands a year that are exported to Japan, so this is big; really big, the TPP for the beef industry in terms of maximizing the value opportunity. (Bob) Although trade organizations like the U.S. Meat Export Federation are working on the issue, cattlemen can also play role. (Halstrom) They should be vocal. They should tell their Congressman the importance of the passage and implementation of TPP from a trade perspective for beef. It helps most coming from the producer’s side. Producers need to talk to their senators and their representatives to make sure that they know the importance of having this passed sooner rather than later to their business. That would be vital to get the message out. (Bob) Today exports add $279 per head marketed, and long-term that value is expected to grow in tandem with world population and the global middle class. (Halstrom) We are one of the lowest cost producers in the world of high-quality beef and most of these countries that we’re selling are not low cost producers. Their ability to supply themselves is limited, so they need to import. You add all that together and it’s a recipe for increased imports of beef; high-quality beef and the U.S. is well positioned to capitalize on that. (Bob) I’m Bob Cervera.
(Jamie) Thanks for joining us. I’m your host Jamie Bloom and I hope you enjoyed today’s show. See you next week on Farm Factor – we’re here every Tuesday on AGam in Kansas.

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