Beef from Australian cattle is being exported to the US in increasing amounts as the American cattle herd begins to slowly recover from a 63-year low in size. Image: Workaway.

Australian Beef Exports to US Likely to Surpass Duty-Free Quota


Australia’s beef exports to the US are on track to surpass their tariff-free quota for 2015, according to Australian Agriculture Minister Barnaby Joyce. Australia’s Department of Agriculture reported earlier this month that the country had already exported 56% of its tariff-free quota, or 234,200 metric tons, to the United States since the start of 2015.

The US supplanted Japan in 2014 to become the largest importer of Australian beef, with $2.4 billion worth of US imports in 2014, up 87% from 2013. One of the main factors in this staggering increase has been greater demand for lean beef, the US supply of which was relatively small in 2014. As of January 1, 2015, the American cattle herd had grown 1% after a 63-year low in 2014, but US beef producers appear to be continuing to remedy their shortage with high levels of imports from large foreign producers like Australia. This US shortage has come at a time when the Australian states of Queensland and New South Wales are suffering a severe drought that has prompted many ranchers to liquidate and export large portions of their cattle herds.

As of May 2015, Australian beef traded at around $2/lb. cheaper than US beef on average, the price of which remains high compared to past years. These cheaper prices have been welcomed by American consumers, but some US ranchers and state officials have been concerned with the influx of cheaper Australian beef over the past few years. One of the most prominent examples surfaced in June 2014, when US chain Chipotle announced that it would begin sourcing more of its beef from Australia, which sparked a heated response from then Texas Agriculture Commissioner Todd Staples, who represented ranchers in America’s top cattle-producing state.

Australia’s Minister of Agriculture stated that a “first come, first served” allocation system would come into effect under the likely scenario that Australia surpasses 85% of its US beef export quota before October 1. If current levels of demand remain steady, this could occur as early as mid-August.

Patrick Madaj is a Research Intern at the East-West Center in Washington and an undergraduate student at the University of Oklahoma.