Ever since I can remember there has been a serious bone of contention between the European Union and the U.S. over American-raised beef. Europe does not want meat treated with hormones. We insist there is nothing wrong with it. The meat is just as safe as the ‘pure’ stuff raised over there. Those small nations on the eastern side of the pond said, “No, no American beef of any kind will be allowed to pollute our diet.”
Thus, the U.S. was shut out of a huge market for four long decades.
The roots stretch back 38 years – to the outer edges of my memory – when the EU first banned hormone treated beef. The battle of the bovines was joined often during the intervening years, usually with the World Trade Organization (WTO) coming down on our side and just as usually with the EU ignoring the ruling. Trade threats were made, retaliatory tariffs were levied.
The first real break came in 2009 when the EU agreed to accept U.S. beef not treated by hormones. It was to be a phased in agreement, with severely limited volumes at the start to be slowly increased year-by-year. But the crafty Europeans always found a way to delay. Annoyed by what American trade negotiators saw as stalling tactics, though, the retaliatory tariffs were reinstated during the last year of the Obama Administration.
Just a few days ago, President Donald Trump announced yet another deal under which the Europeans agreed to accept more American beef. A cautionary note here before the industry breaks out the party hats: The 28 member EU has tentatively agreed to accept 45,000 tons of hormone-free beef from foreign countries every year. We will start slowly, allowed to fulfill 35,000 tons of that quota after seven years. Step-by-step, bit-by-bit, we have again been promised phased-in access.
Same old song and dance? We’ve been there, done that before.
Last Friday, Jennifer Houston, president of the National Cattlemen’s Beef Assn. (NCBA), and other association officers joined Trump at a White House signing ceremony for the memorandum of understanding. After the event she issued this positive and politically appropriate statement: “Today is a good day for America’s cattlemen and cattlewomen. President Trump and his trade team deserve a lot of credit for standing up for America’s cattle industry and securing this important market access to Europe.” Her sentiments were repeated by the heads of every major meat industry trade association.
Julia Anna Potts, president and CEO of the North American Meat Institute was a bit more cautious. Her optimistic but still realistic statement: “We look forward to continuing to work with the Administration to further reduce barriers impeding, and improve access for, U.S. meat and poultry exports in all foreign markets. It is critical to continue ongoing trade negotiations with China, to approve the United States-Mexico-Canada Agreement (USMCA) and to further talks with Japan.”
The White House was making a really big deal about the memorandum, a tentative agreement still-to-be-approved by the EU Parliament. The Administration is desperate to show a ‘win’ to an American ag community that has been asked to shoulder so much of the burden of the recent trade wars. Dropping the Trans-Pacific Partnership, the lengthy renegotiating of the North American Free Trade Agreement and going nose-to-nose with China, one of our largest ag trading partners, has been extremely painful. Unnoticed but taking away the possible future glory of the EU beef trade agreement was China’s action late last week. Reacting to recent U.S. tariff threats, China let its currency drop to an 11-year low for a few days and suspended purchases of U.S. farm products.
You know when you’re sick and describing your pain to a health care professional and she asks you to give it a number – 1 through 10 with 10 being absolute agony? Lots of farmers, especially those growing soybeans, are now talking 7 or 8. The growing agricultural agony is causing farm bankruptcies to increase to near an all-time high. Ag suicides are increasing at a horrifying rate. American agriculture, big and small, needs a shot in the arm now.
How quickly will this beef trade-generated shot of adrenaline hit the cattle market? Great question. The Office of the U.S. Trade Representative (USTR) has said the duty-free quota for high-quality U.S. beef from non-hormone treated cattle, once implemented, will increase from “18,500 metric tons in year one to 35,000 metric tons in year seven. The country-specific quota will benefit U.S. beef producers who participate in the U.S. Department of Agriculture’s non-hormone treated cattle program that was established in 1999. USTR estimates that this quota will increase annual U.S. beef sales in Europe from $150 million to $420 million in year seven.”
When that clock starts that ephemeral, unnamed year one when beef slowly starts to re-enter the European market seems to have been left undefined for the time being.