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Australia's 2003 US beef quota successfully filled.

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DAFF04/052WT - 12 March 2004

Australia's 2003 US Beef Quota successfully filled

Australian Agriculture Minister Warren Truss today announced that Australia had filled its United States beef quota in 2003 - demonstrating that the Australian Government's equitable quota allocation system has again worked successfully.

"Australia first achieved its full quota access to the US market in 2001, when the 378,214 tonnes quota was exceeded by 35,110 tonnes," Mr Truss said.

A quota management system was then put in place at the request of industry to ensure an orderly and equitable fill. For the past three years - 2001, 2002 and 2003 - we have shipped on average about 390,000 tonnes per year to the USA, at an average value of $1.55 billion.

"I am very pleased that Australian farmers and processors have again filled Australia's tariff-rate-quota entitlement of 378,214 tonnes of beef into the US, despite adverse seasonal conditions and the appreciation in the value of the Australian dollar.

"The US market is very important for our beef industry, providing important diversity and an outlet for manufacturing beef not available elsewhere in world markets. The market made a significant contribution to sustaining domestic beef prices."

The Australian export beef industry will face a number of challenges, to meet the 2004 US quota. The export outlook has suffered a substantial shock as a result of BSE cases in both Canada and the US, and higher demand in Japan. Persistent dry weather across parts of Australia remains a concern, and in areas where the drought has broken, there is a high demand for cattle for re-stocking.

However, Mr Truss said the Australia-United States Free Trade Agreement (AUSFTA) was a bright light on the horizon for beef producers.

"Beef producers stand to gain $22 million in year one, rising through $80m by year two or three, and even more in later years," he said.

"These gains will come about through immediate elimination of the in-quota duty of $US4.4c/kg on the 378,214 tonne quota, as soon as the AUSFTA enters into force.

"There will then be a quota increase of 15,000t in Year Two or Three, increasing to 70,000t (18.5 per cent increase) by year 18. Out of quota tariffs (applied at a rate of 26.4% by value) will be phased out beginning in year nine."

Mr Truss said the 15,000t extra access would be worth around $60m in additional exports, rising to $280 million at current prices for the 70,000 tonnes of access in year 18.

"While there is a question over whether beef production in the short term will be sufficient to enable us to fill the beef quota, the Australian Government has put in place the framework, through the FTA, for industry to maximise opportunities in this very valuable market," Mr Truss said.

Further media inquiries:

Minister Truss' office: Tim Langmead - 02 6277 7520 or 0418 221 433

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