There’s a Steak War Sizzling in Japan’s Lucrative Beef Market
(Bloomberg) -- While America’s cattle ranchers rejoice at Japan’s plans to slash tariffs on U.S. beef imports, their biggest rivals -- Australian farmers -- will be eager to ensure they’re not pushed out of the way.
At risk for Australia is Japan’s prized import beef market, which hit a record $3.3 billion in the year ended March thanks to the growing popularity of leaner cuts produced in the West. Australia and the U.S. are the biggest suppliers, with Aussie beef dominating at 51% of the market share compared to America’s 41%. Other suppliers include New Zealand, Canada and Mexico but their share in the market collectively remains under 10%.
“President Trump and his trade team have delivered another great victory for the U.S. beef industry by expanding market access to Japan, our top export market,” Jennifer Houston, president of the U.S. National Cattlemen’s Beef Association, said in a statement.
Meanwhile, Australia’s beef industry body expressed fears over their future prospects.
“It’s a major concern,” said David Byard, chief executive officer for the Australian Beef Association. “This could turn out to be quite a problem.”
Australia had so far been at an advantage to the U.S. after Japan had agreed to lower tariffs in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) agreement. Chilled and frozen beef under the agreement are subject to a 26.6% levy until March 31, after which it’ll be reduced to 25.8%. The U.S., without a deal, faces a 38.5% duty.
No details have been provided by Japan or the U.S. yet on their agreement.
Australia’s trade ministry said it will be closely examining the details when they’re made public.
“Our beef producers are among the most competitive in the world and have enjoyed enormous success in Japan in recent times,” Simon Birmingham, the Minister for Trade, Tourism and Investment in Australia, said in a statement to Bloomberg. “I expect our beef producers to continue to see strong demand in Japan, and back their competitiveness and quality to compete with any other nation.”
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