Export beef surge may trigger U.S. restriction

Press, 25 June 1983, Page 7

Export beef surge may trigger U.S. restriction

NZPA staff correspondent Washington An unexpected surge in estimates of Australian beef available for export to the United States, combined with heavy shipments from New Zealand and Canada, is raising the threat of a clamp on exports from all three countries. The previously uncounted cattle discovered in Australia — one estimate puts the figure as high as 800,000 head — resulted in the Australian Meat and Livestock Corporation supplying the United States Department of Agriculture with revised projections for exports to America this year. New Zealand is sending over much more beef than it did last year, and Canada, the third biggest exporter to the United States, is shipping more because the Canadians are culling dairy cattle. The U.S.D.A. sets a trigger level every year and makes a revised estimate of annual imports each quarter. If the department projects imports at above the trigger level it has the right to ask President Reagan to impose quotas, based on each country’s historical export level, but in practice the U.S.D.A. prefers to save paperwork by asking exporting countries to withhold supplies “voluntarily.” This happened in the last quarter of last year, forcing New Zealand to put about 12,000 tonnes of beef into bond (it was already on the way) to be sold in 1983, a move which depressed prices. Australia was also forced to put beef into bond. The U.S.D.A. must make its third quarter annual estimate by the end of June, but meat industry sources say that they are reasonably confident that the estimate will be a fraction under the trigger level of 1.231 billion pounds (558,382 tonnes), down from 1.3 billion pounds (589,680 tonnes) last year. New Zealand, which traditionally supplies some 25 per cent of America’s imported beef, sent over about 160,000 tonnes last year, not counting the supplies that went into bond. The Meat Board is not revealing its projections for this year, which it says are confidential between the board and the U.S.D.A., but it is believed that they will be considerably above last year’s level, though not nearly as high as the 200,000 tonnes the Australians maintain New Zealand will send over. New Zealand exports are expected to level off soon after current high figures resulting from increased killing rates after drought,

high stocks and last year’s carry-over. The Australians, who traditionally supply more than half America’s beef imports, agreed to a final export figure last year of some 307,000 tonnes. Allocations of shortfalls smaller countries were unable to supply and a breakdown in a customs computer resulted in both Australia and New Zealand landing more beef than allowed for in the original voluntary agreements. It was Australia’s exports last year, increased by culling as a result of the severe drought in Queensland and New South Wales, that triggered the voluntary restraints. The drought was followed by heavy rains which flooded a lot of Australian grazing land, and now cattle thought to have died in the drought have been discovered on higher ground, their weight increased by grazing on unusually lush grass. The Australians are now projecting exports to the United States of 20,000 to 23,000 tonnes a month until October, then 20,000 tonnes a month after that to make a total for the year of up to 270,000 tonnes. Tonnages available for export, because of the size of the country and the nature of the industry there, are much harder to calculate in Australia than they are in New Zealand, and the industry here and the United States Government consequently regard Australian projections with more than a certain amount of scepticism. The Australians would like to see New Zealand exports cut back to avoid triggering quotas or voluntary restraints, but meat industry sources deny emphatically that there has been any deal as wps rumoured last week, though it is admitted that it was suggested. Exporting countries generally have an incentive to agree to voluntary restraints because they are set at the trigger level, whereas quotas are set some 10 per cent below the trigger level. That does not apply this year, however, because there is a floor level for quotas of 1.250 billion pounds (567,000 tonnes), which is above this year’s trigger. Indications that the U.S.D.A.’s projection this month for total imports will be below the trigger level were reinforced by comments from departmental officials who emphasised that anticipated shipment figures supplied by such organisations as the Australian Meat and Livestock Corporation are only one of the factors they use in mak-

ing their own estimates. They also receive projections from agricultural attaches in American embassies in meat exporting countries, talk to other industry organisations and use satellite information. The leap in New Zealand exports this year, fattened by last year’s carry-over, are shown by landing figures for the 5% months from January 1 to June 10; 93,372 tonnes compared with 65,575 tonnes over the same period last year, a rise of 42 per cent. Australian exports over the same period were 116,662 tonnes, a rise of 1.9 per cent over the 114,448 tonnes exported over the same period last year.

Canadian exports were up from 27,875 tonnes to 34,631 tonnes, a 24 per cent rise. The over-all figure for imports from all countries came to 273,337 tonnes for the period, a 15.7 per cent increase over last year’s 236,282 tonnes. While the meat industry waits for the June 30 estimate, the danger remains high that the U.S.D.A.’s estimate at the end of September will be over the trigger level and lead to restrictions over the final three months of the year. This would lead to what happened at the end of last year, when importers took advantage of the situation to buy the meat cheaply.