The European Union has never been a large market for U.S. beef exports, but President Trump announced Friday (Aug. 2) an agreement that will allow sales of 35,000 tons of U.S. beef to the EU.
As a result of the agreement, annual duty-free U.S. beef exports to the EU are expected to nearly triple to $420 million from $150 million, according to the Office of the U.S. Trade Representative.
This news is timely given the ongoing trade war with China that has impacted the U.S. agriculture industry.
Tyson Foods, the nation’s large beef packer, released the following statement after Friday’s announcement.
“Tyson Foods is pleased to witness the signing of the EU beef agreement and the opportunity it presents for U.S. beef producers and the industry as a whole. Our ability to participate in trade with the EU over the years has been challenged by limitations. This agreement provides the opportunity for a more consistent flow of high-quality beef product to meet customer and consumer demands.”
U.S. Agriculture Secretary Sonny Perdue also applauded the move saying getting more U.S. beef into the EU market is another example of President Trump’s efforts to expand markets around the globe for agriculture producers.
“EU consumers desire high-quality products, and I have no doubt that when given the opportunity to purchase U.S. products we will see more Europeans choose to buy American. America’s farmers and ranchers are the most productive on earth,” Perdue noted.
The agreement calls for the EU to accept 45,000 metric tons of hormone-free beef from foreign countries annually with the U.S. being allowed to fulfill 35,000 metric tons of that quota — roughly 80%.
American Farm Bureau President Zippy Duvall also favored the news.
“America’s ranchers welcome the opportunity to supply a bigger share of Europe’s beef market. This agreement advances a three-decade-long effort to expand market opportunities for American agriculture in the EU, and every victory counts. While this is certainly good news, it’s important for U.S. negotiators to remain committed to reaching a broad trade agreement with the EU that levels the playing field for all farmers and ranchers,” Duvall said.
The American Farm Bureau Federation reports the U.S. exports roughly $1 trillion of goods and services to the EU each year. Agriculture represented just 1.27% of the total exports to the EU in 2018.
The new beef quotas will be meaningful to the U.S. Meat Export Federation, which reports that from January-May 2019 the EU purchased 7,056 metric tons valued at $80 million, down 9% from the year-ago period. In May, the EU purchased 1,575 metric tons valued at $17.646 million.
Japan is the largest purchaser of U.S. beef with sales valued at $670 million through May. South Korea is the second-largest customer for U.S. beef export volume, but the largest in terms of sales valued at $711.91 million through May.
Travis Justice, executive director for the Arkansas Beef Council, said Japan’s market was recently expanded to allow more primary cuts of beef that are not typically consumed in the U.S. He said Arkansas ranchers don’t sell directly to Japan, Mexico or any other country. He said ranchers produce about 2% of the nation’s cattle sold into feedlots, purchased by packers and then sold to consumers in the U.S. and abroad.
Justice said the cattle industry overall is better off when export markets are open. He said this increases demand and helps keep live cattle prices higher, adding to farmers’ net worth.