Booming Trade Ahead?


by Greg Henderson, AgWeb

Feb 05, 2020


Cattlemen in the U.S. are ecstatic new trade agreements will provide a much needed boost to domestic cattle prices. Signing phase one of the Chinese trade agreement last month created the most frenzy, but an earlier trade pact with Japan is likely to have more immediate impact.


For several years Japan has been the largest export destination for U.S. beef, peaking at more than $2 billion in 2018. Last year’s total slipped some 5%, but Japan remained the largest consumer of U.S. beef. On Jan. 1, 2020, however, the newly minted U.S.-Japan Trade Agreement went into effect, lowering tariffs on chilled and frozen beef from 38.5% to 26.6%. On April 1, tariffs will drop to 25%.


When the U.S.-Japan Trade Agreement was signed last October, Ethan Lane, National Cattlemen’s Beef Association director of governmental affairs said, “That is a level playing field and competitive access to our largest export market in Japan. This is the product of years of discussions and back and forth, and advocacy and education efforts on behalf of our leadership.”


Reducing the financial hurdle to ship beef to Japan will boost U.S. exports, according to the U.S. Meat Export Federation.


“The fact that Japanese consumers are going to be shouldering less of the tariff burden should increase consumption,” says Joe Schuele, USMEF spokesman. The trade group forecasts Japan will buy about $2.3 billion in U.S. beef this year, a 14% increase.


USMEF forecasts continued sales increases to Japan over the next five years. That’s because tariff reductions will continue down to 25% next year with annual reductions until it reaches 9% in 2033. By 2025, USMEF believes the Japanese will be buying $2.8 billion worth of U.S. beef, which, if realized, would be a 30% increase over 2019 levels.


Schuele says U.S. beef exports will increase because...


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