On July 23, U.S. Secretary of Agriculture Rollins announced a “major trade breakthrough that gives greater access to U.S. beef producers selling to Australia.” She added, “Gone are the days of putting American farmers on the sidelines…This is yet another example of the kind of market access the President negotiates to bring America into a new golden age of prosperity, with American agriculture leading the way.”
But, taking a deeper dive into the background of this trade deal reveals that it doesn’t necessarily benefit cattle producers. Rather, it helps the corporations that slaughter and export beef.
Why was it so hard to export beef to Australia?
Australia has some of the strictest animal disease protections in the world. Since their national herds are free of BSE (bovine spongiform encephalopathy/mad cow disease) and Bovine tuberculosis (TB), they have not allowed beef imports from Canada or Mexico. Those countries have less stringent control systems, and TB is more prevalent in Mexico, leading to Australian concerns about disease risk to their herds and consumers.
What does this have to do with U.S. beef?
Meat packers in the U.S. often import cattle from both Canada and Australia. Unlike Australia and its NLIS (National Livestock Identification System), the U.S. has no mandatory national ID or tracking system that tracks every animal from birth to slaughter. That meant Australia couldn’t verify with confidence where the animal was born, what disease risks it might have been exposed to, and whether food safety standards had been equivalent.
While the cattle were slaughtered in U.S. facilities that meet USDA and export inspection standards, Australia did not consider that enough to offset risks from the animals’ earlier life in another country. As one Australian official put it, “If the cow spent two years in a country with higher disease risk, you can’t undo that by slaughtering it in a clean facility.” (Source: Courier Mail) As a result, exporting beef to Australia was almost impossible for U.S. meat packers starting in 2003, when BSE was discovered in U.S. and Canadian herds.
Here’s what changed:
Since 2019, Australia has allowed imports of beef from cattle born, raised, and slaughtered in the U.S. Thanks to their own assessment that the risk was now nominal, along with increasing trade pressure on other fronts, Australia will now allow beef from cattle that were born and raised in Canada or Mexico but slaughtered in the U.S. t be imported as “U.S.” beef.
That opens the door for multinational meatpackers like Tyson, JBS, Cargill, and National Beef to bring in cheaper cattle from across the border, slaughter them here, and sell the meat as a U.S. product overseas.
What does this mean for cattle producers?
While packers love the deal, neither Australian nor U.S. cattle producers are necessarily happy about it. As the Australian reporter notes in this news piece, ranchers there are concerned that an influx of beef from the U.S. will increase disease risk and reduce the prices and market for their own beef.
For U.S. cattle producers, the market is problematic as well. The Packers can use more, cheaper imported animals, bypassing American-born cattle, or reducing the price for them. This further strengthens a system where processors hold all the power while ranchers continue to fight to break even.
Thus, Secretary Rollins is not quite right when she says this puts an end to American farmers standing on the sidelines. We have yet to see what the result will be, but if the past is prologue, packers will make more money, and cattle producers will make less.
What are some options for U.S. producers?
If you’re a producer, ensure that your state and national organizations are fighting for you and not the interests of the Big 4 meatpackers. Consider policies that restore mandatory COOL (Country of Origin Labeling), that strengthen the Packers and Stockyards Act, and that break up packer monopolies so producers have a fair shot. Finally, promote trade deals that reward producers, not just packers.
