US set to overtake China as Uruguay’s top beef market

The United States is set to overtake China as Uruguay’s top market, fueled by firm demand and strong FOB (free on board) prices, while China’s dominance continues to erode after more than a decade at the top, the Agriculture Department’s Foreign Agricultural Service reported today.

“The industry is also keeping a close watch on potential ripple effects from the U.S.-Brazil trade dispute,” FAS added. “In 1995, the United States allocated Uruguay a tariff rate quota of 20,000 tons product weight a year at a low tariff of $44 per ton. All exports outside the quota pay 26.4% tariff. The U.S. government recently increased Uruguay’s import duties 10 percentage points on all products, including beef. At the same time, the United States increased Brazil’s import tariff for most products by 50% (10% + 40%), directly affecting its beef exports. While tariffs persist at this level, the United States will most likely not import Brazilian beef, increasing imports from other origins including Uruguay. Should this occur, Uruguay most likely will reduce beef exports to China as both markets demand large volumes of similar cuts. Prior to the tariff increase, Brazil was exporting 25,000-35,000 tons product weight a month to the United States. The main product exported from Uruguay to the United States is frozen, boneless, forequarter blocks of beef for processing.”