Trade competition works best on a level field

Australia is a major competitor for U.S. beef in the international marketplace. They are also a major beef exporter to the United States, largely lean trimmings used in ground beef.
That’s both good and bad, Kent Bacus told Wagyu breeders attending the 2024 American Wagyu Association convention in Williamsburg, Va. Bacus is executive director, government affairs with the National Cattlemen’s Beef Association in Washington, D.C.
“The United States excels in producing fed cattle, but we need both fat cattle and lean cattle to make ground beef,” he said. Roughly 12% of the beef consumed by Americans is imported, but 75% of imported beef comes in the form of lean trimmings. “These trimmings are combined to fill the strong U.S. consumer demand for ground beef that regularly competes with chicken for the lower value market share. Ground beef comprises around half of all beef consumed in the U.S., so that’s important.”
High quality Wagyu beef? That’s a different story.
A study published by the Australian Wagyu Association and Meat & Livestock Australia estimated that the U.S. Wagyu market is valued at $1.6 to $2 billion, Bacus said.
At the moment, the study estimates that Australian Wagyu is meeting about 70% of the market share in food service. “On the other side of that, the U.S. domestic market, we’re dominating about 80% of retail” for the market share of Wagyu beef, he said. Overall, the study estimates that Australian Wagyu beef has around a 48% market share in the U.S.
“They’re focusing their marketing and education at the retail level. Now they’re coming after retail.”
Bacus told Wagyu breeders that he’d like to know more about the reliability of the survey data, “But their key takeaway is they anticipate an expansion of the U.S. Wagyu burger market in response to consumer demand. They’re really trying to develop a market there. But they also acknowledge that the one thing they don’t have is the ‘buy local’ advantage that we have,” he said.
“The reason they are looking at this (Wagyu) market is because this is an excellent place to sell beef. And China is very unpredictable.” So Australian Wagyu producers are redirecting much of their effort toward the U.S., he said.
“The Chinese have a tendency to turn off the tap whenever it’s convenient for them. So this is a much more predictable market; it’s a better place to do business. One Australian dollar is about 67 cents U.S. That’s a huge advantage for them,” he said.
LEVEL PLAYING FIELD

While there’s nothing wrong with competition, it must occur on a level playing field. That hasn’t been the case with Australia for a long time, he told Wagyu breeders. Looking at the international beef trade situation, he said beef trade with Australia is one of the most frustrating things the U.S. has dealt with. “We’ve had a trade agreement with Australia for 20 years. We’ve been banging on the door to get access there but they’ve used BSE as a catalyst to keep us out.”
As the trade situation rolls out, Bacus encouraged Wagyu breeders to share information with NCBA. “Unless you’re telling us, we don’t know. So I appreciate the Wagyu staff keeping me updated. That’s the whole point of our affiliation between NCBA and AWA.”
Beyond that, he said there’s a great case building to show justification for the U.S. government to intervene. “I think the fact that the Australians have denied us access for a long time elevates us even higher on the list,” he said.
“Keep in mind, the Australians are still key security partners in the South Pacific. So a full-on trade war? Probably not. But I think there are some strategic actions that can occur that were trying to explore with USTR (the U.S. Trade Representative) and USDA,” he added.
“We want to make sure that any trade we have with them is fair and reciprocal. Right now, it’s not.”
Turning his comments domestically, he said some important tax provisions are set to expire. “Things like estate tax relief and others that have been very helpful to us.”
In preparation for that discussion, NCBA surveyed its members on tax issues. “If the estate tax provision expires, if we see that reset back to $5 million per individual, that will impact more than 60% of the respondents,” he said. “So if you look at the value of your land, the value of your livestock, your investments, your whole business, and the value of your estate is over that $5 million per individual threshold, the tax rate would be 40%.”
“This is going to be a big fight for us because Congress has a major spending problem and they’re looking for ways to pay the bills.” To that end he encouraged Wagyu breeders to visit with their U.S. representatives and senators and share their concerns.