Friday, May 29, 2015

Aussie beef hits tariff wall

Beef imports from Australia are poised to hit a tariff wall of 26.5 per cent because imports so far this year are running about 46 per cent ahead of last year.

When imports hit 35,000 tonnes, the Canadian tariff kicks in.

Uruguay has already hit its Canadian tariff wall at 12,000 tonnes.

Canada’s beef herd has been decimated by a series of challenges, including BSE (Bovine Spongiform Encephalopathy, or mad cow’s disease) that cut off exports and cratered prices, United States Country of Origin Labeling regulations that depressed Canadian cattle prices,  a steep increase in feed costs when a combination of drought and ethanol production set corn prices soaring and then droughts hit Canadian pastures.

Now Canadian beef prices are near or above record price levels, making imports extremely attractive.

The Australians are pushing for increased access to markets as part of the Trans-Pacific Partnership trade negotiations which are now coming close to a possible agreement.