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 Mexico. 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. to 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?
[Please see below for an update on this information.]
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.
UPDATE – In the end, this trade agreement may mean very little to U.S. packers and producers.
7/30/2025
Here’s additional information I’ve gathered based on some great input from a reader in Australia. I should have looked this up for you earlier, but unfortunately, I didn’t think of it. My apologies!
Before Australia’s ban in 2003, U.S. beef imports rarely exceeded 23 tonnes a year, or less than 1% of beef consumed in Australia. This is due to the comparative prices of beef in the two countries and the cost of shipping overseas. In rare cases, when supply and exchange rates on the dollar were favorable, U.S. imports have climbed. Meanwhile, Australia produces between 2.2 and 2.5 million tonnes of beef a year, much of it exported to the U.S. and Japan. That puts them in the top three of beef exporters alongside the U.S. and Brazil.
There are varying predictions about how this will affect cattle producers in Australia. This article, shared by Warren Pensini, suggests that the change is insignificant, and others back this up.
Sums show US beef exports to Australia would makes zero financial sense
The primary concern of the Cattle Council of Australia is that imports from other countries meet the same biosecurity standards as those required of Australian exports. (The Nightly)
In the end, in terms of real dollars for producers or processors, this deal is unlikely to move the needle, but it looks good in a press release.
It’s also a move by Australia to defuse current trade tensions, a gesture of goodwill to prevent the U.S. from following through on tariff threats, and a way to protect key Australian exports to the U.S., which are far more economically significant than the trickle of U.S. beef imports.
I’d venture to guess that our U.S. trade negotiators are completely aware of all this and framing it as a big win for American farmers who may not be aware of the ins and outs of these kinds of things is a great way to make themselves look good. Spin – I guess I forgot for a minute about how deep it can go.
I talked about spin in an earlier article. I’ll pay better attention in the future.
Wikipedia’s definition of spin:
In public relations and politics, spin is a form of propaganda, achieved through knowingly providing a biased interpretation of an event. While traditional public relations and advertising may manage their presentation of facts, “spin” often implies the use of disingenuous, deceptive, and manipulative tactics.
Not sure there will be too much US beef heading to Australia, I’m an Australian cattle producer and I’m not one bit concerned. Have a read of this article that appeared on Beef Central in Australia today, Kathy.
https://www.beefcentral.com/trade/sums-show-us-beef-exports-to-australia-would-makes-zero-financial-sense/
This is excellent information, Warren. Thank you so much for sharing! It makes perfect sense and I especially like the comments that follow. It appears that this new trade deal is simply performative on the U.S.’s part and I applaud Australians for their trade negotiation skills.
This is all purely a political play, firstly by Trump, now by our government in an attempt to pacify Trump and gain favour in other areas. Pre 2003 prior to the BSE outbreak in the US the most US beef ever imported into Australia in a 12 month period was 23 tonnes. Literally a drop in the ocean in terms of US beef production, and with the current market dynamics stacked against US beef it aint gonna come anywhere near even that number anytime soon.
Kathy, Texas has closed its border to Mexican imports due to screw worm. Can such Mexican cattle still find their way into American feedlots? And does Mexico need American cattle to maintain its feedlot supply needs?
New Mexico and Arizona borders are currently open with Texas planned to reopen in August sometime. It seems borders are opened and closed based on what’s being seen as animals come in and what they’re finding about the screwworm. I don’t know how much Mexican beef is required to meet demand in the U.S. But the screwworm is going to be a problem for some time given what’s happening with drug cartels. I wrote about that here: https://onpasture.com/2025/05/12/the-surprising-link-between-cattle-cocaine-and-the-screwworms-comeback/
Aren’t producers the ones importing the cattle to be finished and marketed here? Honest question. Am I being too simple?
If the producers are importing the feeder cattle, finishing them here, and selling them to the packers, then the producers must be benefiting in some way. ?
Fair question, Ron. Here’s what I’ve found. (And it corresponds with what my cousin told me. He works in a very large, packer-owned feedlot and when I visited, he pointed me to the pens where the Mexican cattle were being fed and told me many of the same things you’ll read below):
The majority of cattle imported into the U.S. from Mexico and Canada are brought in by or on behalf of large beef processors, for one of three main purposes:
• Feedlot finishing – Most Mexican cattle are younger and arrive as feeder cattle. They are typically sent to U.S. feedlots (often owned by or contracted to packers) before slaughter.
• Direct slaughter – Some cattle, especially from Canada, come in as finished cattle and go straight to the packing plants.
• Blending supply – Packers use imported cattle to maintain a steady supply and keep prices stable or lower, especially when U.S. supplies are tight or domestic cattle prices rise.
So, why do packers import?
• Cost control – If U.S. cattle prices go up, packers can import cheaper cattle and avoid paying higher prices to domestic ranchers.
• Year-round supply – Imports help fill gaps in domestic production, especially in the winter or during droughts.
• Leverage over producers – With the option to import, packers can undercut domestic producers during price negotiations.
This means U.S. ranchers are often competing with foreign cattle, even when they’ve done everything right: produced high-quality animals, on time, and at scale.