A Queensland meat processor predicts the price of beef could fall by as much as 30 per cent if the US starts exporting beef to Australia again.
Australia has not accepted imports of beef products from the US since 2001, following outbreaks of mad cow disease around the world.
However, the Federal Government is currently assessing the biosecurity risk of uncooked beef imports, and trade could resume by as early as July if it is deemed to be safe.
Food Standards Australia New Zealand recently assessed the mad cow risk of US beef was very low.
“It is not assured US beef will come to Australia but it is highly likely in the back half of the year,” said Terry Nolan from Nolan Meats at Gympie near the Sunshine Coast.
US beef is traditionally more expensive than local meat, and therefore American exporters don’t think it is worth selling in Australia.
However, a shortage of cattle in Australia means local prices are higher than usual, providing an incentive for US exporters.
Mr Nolan said if beef imports from the US resume, beef prices in Australia would fall.
“Australia has a depleted herd and we’re seeing record cattle prices, whereas the US has large inventories of cold stored beef,” he said.
“They have an increasing herd and a decreasing price of their live cattle, so I think it is almost inevitable we will see US beef come to Australia.
“I think that could severely depress the price of livestock in Australia and could be detrimental to the producing sector.”
While Mr Nolan predicted the trade would have a negative impact on beef farmers, he said consumers would benefit.
“I think we could see an easing of [beef prices] by as much as 20 to 30 per cent, which would be welcomed by consumers,” he said.
Australia’s Department of Agriculture said it expects the US to only export 100 tonne of beef per year, focussing on specialist cuts, and is therefore not a big risk to Australian farmers.
“I think that number is underestimated because there could be a wide range of chilled and frozen products coming in,” Mr Nolan said.
“It could be high quality table meats and products that are suitable for manufacturing, such as grinding and the food manufacturing sector.”
Joel Haggard, the senior vice president for the Asia Pacific region of US Meat Export Federation, said it was too early to know how significant US beef exports to Australia could become.
“While our organization and our exporters have received enquiries from Australian buyers about US beef, we anticipate demand will primarily be for specialty and premium products,” he said.
“The nature and scope of that demand will also be shaped by final import conditions which have yet to be determined.”
Blair Angus, a grazier at Clermont in central Queensland, said he does not think US imports would threaten the viability of Australian producers.
“I am sure producers will be concerned about it and it is something we shouldn’t take lightly but we have to have faith in our authorities to implement these types of trade,” he said.
“I don’t see a lot of product coming in here unless it is high end specialist product.”
Furthermore, Mr Angus said the lure of the Australian market to US exporters could only be short lived, if the price of Australian beef starts to drop.
“I think once things stabilise number wise there won’t be that attraction for the US to export to Australia.”
Free trade critical, but food safety should not be jeopardised.
Despite the concerns, Mr Nolan said two-way trade with the US was critical to the profitability of Australia’s beef sector.
“Australia is a trading nation, we have huge agricultural resource capacity and too small a population to absorb all the production,” he said.
“So we support free trade and I say that loud and clear, the future of our red meat industry is in international market access.”
That sentiment is shared by Mr Angus, who said Australian authorities should use the opportunity to reduce the cost of exporting Australian product to the US.
“We do need this as a nation but it has to be bi-lateral, the same systems must be imposed on their product coming in as our product going out,” he said.
“I see it as an opportunity to negotiate.”
The US does not have the same level of food safety and export protocols as those imposed on Australian producers.
Australia has the Australian Livestock Production Assurance program to demonstrate animals are free of disease, the National Livestock Identification System for the traceability of cattle and the National Vendor Declaration system.
The US Meat Export Federation said it was awaiting a final determination of Australia’s biosecurity review, but was confident its product was safe to export.