July 13, 2007

Argentina hopeful of US beef market access in 2008

The Argentinean Beef Promotion Institute is optimistic that Argentina can penetrate the American market for unprocessed beef in 2008 after the US has barred Argentine beef in 2000 due to foot-and-mouth-disease.

In 1999, Argentina exported 23,500 tonnes to the US while Australia exported 291,000 tonnes also in the same year.

Argentine beef to the US is expected to fill its 20,000 tonne quota (with a US$4.4 per kilogramme in-quota tariff). Shipments above quota will encounter a 26.4 percent out-of-quota tariff. Uruguay also has a 20,000 tonne quota in the US but its shipments consistently exceed this tonnage. In 2005, US imports of Uruguayan beef pegged at 200,000 tonnes - with the 26.4 percent out of quota tariff payable on 180,000 tonnes. The tariff on large volumes indicates Uruguay's price competitiveness for its beef.

Once it steps on US, Argentine exporters will act in similar manner to their Uruguayan counterparts and exceed their quota and consequently increase competition for Australian beef.

The opening of US market will also be an opportunity for Argentine exporters to shift its shipments from lower value markets (such as Chile) to higher value buyers such as Canada and Mexico, following Uruguay's path over the last few years.