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U.S. beef prices set records this year after drought drove
ranchers to reduce the country's herd to its smallest level in
decades, and meat companies are relying more on imports to
process into ground beef for hamburgers.
Paraguay has not negotiated to sell beef to the U.S. under its
own quota agreement, so it must compete with other countries in
the same situation to fill a group tariff-rate-quota, said
Stephen Sothmann, executive director of the Meat Import Council
of America.
The quota for these countries, including Brazil, Ireland, Japan
and Namibia, is about 65,000 metric tons annually with a tariff
of 4.4 cents per kilogram, Sothmann said. Suppliers filled the
quota early this year, he said.
"There's typically now a pretty big race to get product in under
that quota," Sothmann said. "The likelihood of this changing the
amount of supply of imported beef is very limited."
Suppliers face a steep 26.4% tax on the value of products
shipped above the tariff-rate-quota, making those deals
economically unviable.
The U.S. Department of Agriculture forecasts total U.S. beef and
veal imports at about 1.6 million metric tons this year.
Paraguay may eventually ship 3,250 to 6,500 metric tons
annually, or 5% to 10% of the tariff-rate-quota for the
countries without individual agreements, the USDA said.
Analysts expect Paraguay to compete with producers like Brazil
to supply lean beef that is blended with fattier U.S. supplies.
The U.S. reinstated Brazil's ability to ship raw beef in 2020
after a halt over food-safety concerns. Namibia first sent
commercial beef to the U.S. in 2020 after 18 years of trade
negotiations, but has not made shipments since, U.S. records
show.
The U.S. previously blocked beef from Paraguay due to concerns
about the livestock disease foot and mouth, but said an
extensive review found shipments are now safe under certain
conditions.
(Reporting by Tom Polansek; Editing by Rod Nickel)
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