Harvey Beef poised for US quotas

WA's largest exporter to the US could face supply limits as strong beef exports threaten to trigger a quota system.

Harvey Beef stands to be affected by the restrictions, with protocols geared to give precedence to the larger Eastern States exporters.

The Federal Department of Agriculture has already warned exporters it was likely 65 per cent of the quota would be reached by late July at current usage rates, which would activate the department's exporter evaluation process.

This year Harvey Beef exported about three million tonnes of beef, worth about $14 million, to the US market.

In absolute terms, 2014 beef exports to the US from WA were relatively small at $14.6 million/3.3 thousand tonnes compared to $2414 million/587 thousand tonnes from the Eastern States.

Federal Agriculture Minister Barnaby Joyce warned the industry last week that higher than average beef exports from Australia to the US could enforee the quota allocation system for the first time under the current beef export arrangements to the US market.

Australia has access to the US beef market through a duty-free country-specific quota of 378,214 tonnes, allocated under the 1995 multilateral Uruguay Round Agreement on Agriculture, plus an additional duty-free quota under the Australia-US Free Trade Agreement, which reached 40,000 tonnes in 2015, giving Australia a total duty-free quota of 418,214 tonnes for 2015.

If the quota is reached, the remaining 15 per cent of the US duty free beef quota (418,214 tonnes) would change from being first-come first-served to being allocated proportionally, based on the exporter's record of shipment.

Harvey Beef executive sales manager Len Rae said his company was aware of the situation and the possibility the Australian export beef quota to the US might be triggered.

"Harvey Beef, like most Australian USDA-approved beef exporters, has a substantial business in the US," he said.

"If the quota is indeed triggered and, as in the past, the traditional system is applied being where US export beef quota is allocated proportionally to how much individual processor exports to the market, then we will, of course, still be able to export beef to the US market within the quota allocated to us."

Mr Rae said his company was monitoring this situation closely.

"We're waiting for the relevant authorities both in Australia and the US to advise on the structure of how the system will work if the quota is triggered, and we will then work within approved framework of the program," he said.

"It is also worth noting that while the US remains one of our key manufacturing beef markets, we are still actively trading these same products into many global markets such as China, Indonesian, Japan, Korea and the Middle East just to name a few."

Mr Rae also said export beef markets were fluid and flexible.

"These markets change constantly due to market-price highs and lows, volume demands and changes in export protocols," he said.

"This is all part of the dynamics of international business and Harvey Beef is confident it produces quality beef products suitable for varied export markets and has the flexibility and longstanding customer base to manage any changes in market conditions."