Future of Beef Industry Relies on International Trade

December 22, 2015 02:05 PM
Future of Beef Industry Relies on International Trade

By: Austin Brown III, Chairman, TSCRA Marketing Committee 

In 1924, my great grandfather established a cattle operation north of Beeville, Texas. Over the years, the ranch has been passed down from generation to generation, and today I work alongside my wife, children and parents to keep the family ranching tradition going strong. 

While my wife and I always encourage our children to follow their own paths, we work tirelessly to keep our ranch thriving so they can successfully run it, if they choose to do so, after we are gone.  

In order for my children’s generation to continue ranching, we must take full advantage of marketing our product to other countries. Finding new and innovative ways to boost the U.S. beef industry is important now and it will become even more crucial for generations to come.  

Texas and Southwestern Cattle Raisers Association (TSCRA) leaders and members readily recognize the importance of marketing our product internationally. A key component of foreign beef trade is included in the Trans-Pacific Partnership (TPP) agreement that was announced by trade ministers on Oct. 5 in Atlanta, Georgia.  

Beef exports currently add over $350 per head of cattle sold in the U.S., however the TPP agreement will significantly increase demand and growth. The TPP will reduce foreign taxes in the form of tariffs on U.S. beef and level the playing field across 11 other Pacific Rim nations.  It will also expand demand for beef products among nearly 500 million consumers in TPP partner countries.  

The countries, other than the U.S., included in this agreement are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. These nations encompass nearly 40 percent of the global economy.

Since the U.S. already has free trade agreements with Canada, Mexico, Australia, Peru, Chile and Singapore, the U.S. beef industry is expected to reap the most benefit from the TPP by accessing additional markets in Japan and Vietnam.

Japan is currently our top export market with $1.6 billion in beef sales in 2014. The TPP agreement will secure tremendous access to Japan’s beef market. According to the USDA, Japan will eliminate duties on 74 percent of its beef product imports and reduce its tariffs on fresh, chilled and frozen beef cuts from the current rate of 38.5 percent to 9 percent within 16 years.  

Most of the high-value U.S. beef is sold domestically. Low-value offal, such as tongues, livers, hearts, stomachs and kidneys are in higher demand in countries like Japan and Vietnam. Through the TPP, the current 21.3 percent tariff on these beef parts would, in some cases, be cut in half immediately and will be completely eliminated in 6-16 years. We need to take full advantage of exporting beef products that are less popular for Americans but considered a delicacy in other parts of the world.  

The TPP will also create unprecedented trade opportunities in other Pacific Rim nations. In 2014, the U.S. exported $22.1 million in beef products to Vietnam with tariffs as high as 34 percent. Through the TPP, these tariff’s will be eliminated in 3-8 years, and tariffs on fresh and frozen beef muscle cuts will be eliminated in 3 years. In Malaysia, New Zealand and Brunei, tariffs on beef will also be abolished if TPP is signed into law.  

While the TPP has been successfully negotiated between the U.S. and other Pacific Rim nations, our work isn’t nearly finished. The agreement must be passed in Congress and signed into law by the president. TSCRA leaders and staff are working diligently to make federal elected officials aware of the many economic benefits the U.S. beef industry could achieve though the TPP agreement. We will also continue working with other stakeholders to urge Congress to act swiftly on final passage.   

For years, the U.S. has been missing out on some tremendous opportunities to market beef products to other countries due to inaction on the TPP. It is time to pass this important trade agreement and give my children and future generations the tools needed to be successful cattle ranchers.  

Austin Brown III, has been the Chairman of the Texas and Southwestern Cattle Raisers Association (TSCRA) Marketing Committee since 2013. Brown, his wife Jody, and their children, Cuatro and Addie Ruth, own and operate their family ranch in Beeville, Texas. Brown also serves as Chairman of the Texas Beef Council and has been involved in sharing Texas ranching heritage stories with consumers. Watch a video about the Brown family ranching tradition by clicking here http://txbeef.org/texas-stories/stories/stewards-of-the-land.

Source: Texas and Southwestern Cattle Raisers Association 

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