Economic Tidbits

Beef Imports & TRQs

The U.S. is the world’s largest beef producer, a large beef exporter, and is the world’s second-largest beef importer as well. Most imported beef goes into ground beef and is served in the nation’s food service industry. The volume of beef imports typically runs counter-cyclical to the cow inventory—when the beef cow herd shrinks, beef imports increase. Last year’s imports were the highest since 2005 and with the ongoing contraction of the cow herd, beef imports are expected to be even higher this year.

Countries exporting beef to the U.S. must be approved by the Animal and Plant Health Inspection Service based on animal disease status and the risk of disease introduction. The Food Safety Inspection Service (FSIS) also certifies that foreign food regulatory systems in exporting countries employ sanitary measures equivalent to U.S. standards. Presently, 17 countries are eligible to export beef to the U.S. Not all countries eligible to sell beef into the U.S., though, have unfettered access to the U.S. market. Many years ago, the U.S. established tariff-rate quotas (TRQs) to govern beef imports. TRQs combine aspects of quotas, limiting import quantities, with tariffs, taxes on imported goods. Under TRQs, a limited quantity of a good, the quota, can be imported at a reduced tariff rate. If the quota amount is exceeded, a higher tariff rate is applied to quantities exceeding the quota. TRQs apply to all countries exporting beef to the U.S. except Mexico and Canada where they were removed under the North American Free Trade Agreement (NAFTA) and the U.S., Mexico, and Canada free trade agreement (USMCA). U.S. beef exports to these countries are treated similarly. These two North American neighbors account for 48 percent of U.S. beef imports (Figure 3).

Australia, New Zealand, Argentina, and Uruguay have country-specific quota amounts. Australia and New Zealand have the largest quotas, 378,000 and 213,000 metric tons respectively, followed by Argentina and Uruguay with 20,000 metric tons each. Australia exports below quota are not subject to a tariff, due to a free trade agreement, while volumes above the quota face a tariff of 21.1 percent. Imports originating from New Zealand, Argentina, and Uruguay below quota are assessed a small tariff and volumes over quota are assessed a tariff of 26.4 percent. Lastly, all other eligible countries, including Brazil, are combined into an “other” category subject for a single quota amount of 60,000 metric tons. Imports below quota for the other category are assessed a small tariff and those above quota face a tariff of 26.4 percent. For context, the U.S. imported 1.5 million metric tons last year.

Market conditions in the U.S. resulted in larger beef imports in 2022. A shrinking cow herd and reduced beef production this year could mean even higher beef imports. Once the cow herd and beef production starts to rebound, look for imports to decline.

Figure 3. Countries Exporting Beef to the U.S.

Source: Jack Brower, Reviewing Tariff-Rate Quotas for U.S. Beef Imports, USDA Foreign Agriculture Service, December 2022.

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