A lot happened on the trade front last week.
Japan lifted restricting tariffs on United States beef, while Canada and Mexico removed tariffs on other U.S. goods.
An economist shares how this will affect the red meat industry.
U.S. Secretary of Agriculture Sonny Perdue on Friday announced the United States and Japan reached new terms and conditions, which eliminate long-standing restrictions on U.S. beef exports. Previous conditions restricted beef products, derived from cattle over-30 months of age, from entering Japan.
The U.S Mest Export Federation (USMEF) estimates red meat exports to Japan increase by seven to 10-percent, or $150 to $200 million per year. USMEF economist Erin Borrer expects to see beef demand continue to grow in Japan.
“Having cattle from all ages, we’re seeing the potential for $150 to $200 million in added sales annually, (with) the biggest increases in the variety meats category,” Borrer said. “That includes mountain chain tripe, tongue, and abomasum – Variety meats that are important to the value of every head we produce. Then talking about cuts, we expect Japan to have demand for short plate, outside skirt, hanging tender, chuck eye roll, middle meat, short rib and possibly some brisket.”
The U.S Trade Representative’s (USTR) Office later announced the removal of Section 232 tariffs on steel and aluminum imports from Canada and Mexico. This move then prompted Canada and Mexico to lift tariffs from other U.S. goods, such as red meat imports.
“(It’s) tremendous to see the 20-tariff on U.S. pork into Mexico eliminated. Clearly, our exports have been hit hard by the tariffs, a decrease of $109 million in the first quarter. “We’ve seen (the) U.S. market share drop from 89-percent to 85-percent. Canada’s was the cooked beef tariff line, but a 10-percent tariff on $168 million did have an impact,” Borrer said.
Borrer says the United States red meat industry now has reason to be excited about the U.S.-Mexico-Canada Agreement (USMCA), as long as this hurdle stays in the past