The United States is Australia's major competitor in key-value beef markets and latest statistics and trade data from US Meat Export Federation indicate that it is still performing strongly in Japan despite considerable tariff disadvantage and continuing to build on its record shattering 2018 year in the Korean market.
For the first two months of 2019, US exports to Japan are up 8 per cent in volume on same period 2018 and 10pc in value.
January was the first full month of tariff reduction under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership for those member countries (including Australia) who are competitors of the US in the Japan beef market.
Australia, through its earlier bi-lateral agreement with Japan (JAEPA), was already well advanced in tariff reduction but other countries such as Canada, Mexico and New Zealand gained an 11pc reduction from 38.5pc to 27.5pc when CPTPP came into effect on December 30, 2018.
This gap widened further on April 1 start of Japan fiscal year) when the next step in the 16-year reduction schedule occurred dropping the tariff on both chilled and frozen product to 26.6pc.
Commenting on early trade indications post implementation of CPTPP, Dan Halstrom, USMEF president and CEO said "It's great to see Japan's demand for US beef increase in January despite these tariff rate changes for our major competitors."
He added: "But this advantage will become more and more pronounced over time so negotiations toward a US-Japan trade agreement cannot come soon enough. The playing field needs to be levelled as quickly as possible so that the US industry can continue to capitalise on booming meat demand in Japan."
On that score Mr Halstrom's wishes now appear to be gathering pace.
Back in September 2018, while attending the United Nations General Assembly, President Donald Trump and Japanese Prime Minister Shinzo Abe announced their agreement to negotiate a bilateral trade agreement.
The first round of those negotiations has now taken place with a two-day meeting that started on April 15 and is expected to lead into a series of upcoming summits between president and prime minister.
Essentially a scoping exercise to define the agenda, this first round of negotiation indicated both sides may be looking for quick results.
US Trade Representative Robert Lighthizer is reported to have avoided controversial issues that might prolong talks while Japanese Economic Revitalisation Minister Toshimitsu Motegi indicated market access provisions established in previous deals (CPTPP and EU-Japan EPA) as the limit of Japan's commitment to the current talks.
It's a galling reminder that Australia was not only slow in getting a free trade agreement in place with Korea but also short-sighted in settling for a very restrictive safeguard.
It would seem quite possible therefore that the negotiations may lead to a two-part deal; the first limited to goods such as motor vehicles and agriculture and the second with other trade and investment items.
With the harder bits left for later, the first stage may well be able to be concluded and passed through the respective countries' legislature within the year.
That would put the US only one year behind its competitors in the Japan beef market if it received a similar tariff reduction schedule to CPTPP.
Meanwhile in nearby South Korea the US has followed up its huge result in 2018 with a further 7pc gain in Jan-Feb this year.
US export tonnage (excluding variety meats) rocketed from 170,000 tonnes in 2017 to 225,000t in 2018, a 32pc increase.
It's a galling reminder that Australia was not only slow in getting a free trade agreement in place with Korea but also short-sighted in settling for a very restrictive safeguard.
The timing difference gives the US an ongoing 5.3pc tariff advantage over Australia while the safeguard setting currently at around 170,000t has triggered every year since inception of the deal and resulted in tariff snapback to 40pc.
Some consolation however that the snapback drops to 30pc this year.
But the US has also been proactive in Korea with product development that uses cuts such as chuck eye roll and short plate in the trend toward home meal replacement (HMR) kits and wider use of brisket point in Korean barbecue.
USMEF used funds from the Beef Checkoff Program to partner with Korea's second-largest retailer Homeplus to recently launch two new HMR kits.
USMEF's director in Korea, Jihae Yang, said: "Food products offered in Korea's retail sector are changing fast, as the number of single-person households and double-income families are rapidly increasing.
"Lifestyle changes affected by a 52-hour work week system and consumption trends such as 'honbob' or 'honsool' (eat alone or drink alone) are impacting the meat business across all sectors.
"At the same time per capita meat consumption continues to grow in Korea thanks to a favourable trade environment and expanding incomes."
Processing subdued
WITH the Easter and Anzac Day public holidays impacting kills and physical livestock markets this week, there is little in the way of market signals.
In southern and central Queensland published and non-published grids remain unchanged at 530-535c/kg for 4-tooth ox and 440 for heavy cow.
Traditionally May sees a step up in movement to works as stock camps get into full swing but there are no immediate signs of any rush at this stage.
Producers in the western regions are no doubt taking advantage of recent rain to gain what they can so what eventuates this year as a pre-winter run from those areas remains to be seen.
Closer in it may be a little different.
The latest change seems to have favoured only the far south-west and south-east coastal areas with little in-between.
First frosts of the season are predicted for this weekend so that may encourage a few to come forward.
In the south one major processor released an updated grid at Wagga on Tuesday which repositioned 4-tooth ox at 545c and heavy cows 430.
Prior to Easter cow numbers were still holding up in NSW markets with 900 at Inverell, 800 at Carcoar and over 1000 at Wagga last week with averages pretty much on par with over-the-hooks rates.