Australia Captures Japanese Beef Market Share from US

The Australian beef industry is the newest beneficiary of recent developments in global beef trade. In January 2018, the Trump Administration chose not to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Out of the twelve countries negotiating, eleven proceeded to a final agreement, including some major beef exporters. Countries like Australia, New Zealand, Mexico, and Canada are now benefiting from the CPTPP through tariff reductions and eliminations that will take place over the next 15 years. Currently a major US export market, Japan will now likely import more beef volume from Australia as a result of tariff reductions from 38.5 percent to 9 percent per the CPTPP. Meanwhile, US beef products will still face a 38.5-50 percent tariff.

The 2018 year-over-year increase in Australia-Japan beef trade could be $139 million, while the projected US losses could be as high as $143 million. For Mexico, Canada, and New Zealand—other countries benefiting from tariff reductions—Japanese beef export market share is expected to increase only modestly at a combined $4 million in 2018. The US now faces the task of developing a bilateral free trade agreement with Japan that will match the favorable CPTPP terms granted to competing countries. As new global beef trade rules emerge, Gro Intelligence subscribers see all the up-to-date data and analytics necessary to stay ahead of the curve.