DENVER – An agreement was reached in mid-2009 between the United States and the European Union that defused the tension over beef from cattle raised with growth promotants. In exchange for the US commitment to eliminate retaliatory tariffs on imports of certain EU products, the EU agreed for the first time to create a duty-free quota for imports of high-quality beef.

When the quota first opened in August 2009, expectations were somewhat modest. For the first full quota year of export activity (July 1, 2010 through June 30, 2011) the US Meat Export Federation (USMEF) projected the volume of high-quality US beef exports would be roughly 13,000 metric tons. But based on the current subscription of import licenses for May and June, US beef shipments should reach 16,500 metric tons.

John Brook, USMEF regional director for Europe, Russia and the Middle East, calls these results particularly impressive because they come at a time when consumption of medium-quality, domestically raised beef is sharply declining in Europe.

With the US export volume approaching 16,500 metric tons, Australia shipping roughly 3,000 metric tons and Canada adding small volumes, the 20,000 metric-ton quota will be nearly fully utilized this year. Although this is positive news in terms of trade activity, Brook said it illustrates the urgency of negotiating an expansion of the duty-free quota to allow for further growth. Additional exports of high-quality beef to Europe are possible outside of the duty-free quota, but very difficult to achieve in the current economic climate, he added.

“The export figures to the EU are well ahead where we thought we would be at this time,” Brook said. “We anticipated that the US might be shipping between 12,000 and 14,000 tons of beef meat. The average is now clear from the statistics that we’re much closer to 16,500 tons, which really puts us almost one year in front of where we thought we were going to be. I find this all the more encouraging because the consumption of beef meat in the EU is not fantastic at the moment. There is no question that the medium quality is suffering quite badly. But it’s very, very encouraging to see that despite the rising prices that the sector is still growing well.”

Brook said the filling of the quota is good news in terms of trade activity, but creates an urgency for negotiating an expanded quota.

“The duty-free quota of 20,000 tons as it has been more or less fully subscribed to from the US , plus some beef from Australia and a little bit from Canada, will effectively put a ceiling on further growth in the near future,” Brook said. “And now the main objective is to get that quota increased to 45,000 tons.”