Hands up if you thought Donald Trump’s 10pc Liberation Day tariff on Australian beef exports to the US was going to hurt North Queensland beef producers?
Before we get too excited, let me inform you that nearly all of the beef from cattle killed in Queensland and especially in North Queensland is sent to the US where it ends up as beef patties in burger chain stores like McDonalds, Burger King and Wendy’s. It seems reasonable to think that our guys might suffer if the tariff is imposed, for example, on meat processed at the JBS plant at Stuart and shipped out of the Port of Townsville.
Well, I’ve got my hand up and if you’ve raised yours, join the club. But now I have to tell you that you just joined DED, known worldwide as the society for Dumb Economic Drongos. See, you never want to join a club of which I’m a member. Nothing good will come of it.
I’ve been talking to a few people who know about such matters which is always a handy thing to do, especially for anyone who is a member of DED. It goes without saying us DED Heads need all the help we can get.
What I found out is that the only people who will be hurt by President Trump’s 10pc tariff will be the millions of Americans who collectively eat 50 billion burgers a year. No, that is not a misprint. They eat 50 billion burgers a year. This translates to 4.2 billion burgers a month or an average of three Big Mac’s per person every week. Think of all those cops on stake-outs, eating burgers and drinking the world’s worst coffee, multiply it by a few hundred million … and howzat, 50 billion burgers.
And get this, the Yanks hold the record for the biggest burger ever made. It weighed 1,795 pounds and cost $7,799. Inside it, possibly, were two minced Brahmans, which in another life, lived a hard and vigorous existence among the spinifex ridges north of Cloncurry. I don’t know who ate this giant burger but it was probably some guy in Manhattan, who, when he died they had to knock down a wall in his apartment block and bring in a construction crane to lift his body out of his 10th floor bedroom. They reckon burger overload can do that to you.
Economist Diana Castorina from the College of Business, Law and Governance at James Cook University is a member of the Centre for International Trade and Business in Asia. She said Australia provides approximately 400,000 tonnes of beef a year to the US market at a value of around AUD$4.2B. She said when the 10pc tariff is passed down the line from the US importer to the burger store owner, roughly AUD$420M (US$273M) of additional costs a year will be passed on to US burger eaters. This could be even more as Ms Castorina said tariffs have ripple effects which can affect supply chains along the line, driving up prices even further.
All up this will cost residents of this hamburger loving nation an extra AUD$8.5M a week to have some lean Aussie beef sandwiched between two sugary brioche buns. Instead of Mr Trump’s 10pc tariff impacting on our cattlemen it is slugging America’s burger lovers right where it hurts. And you know where that is? It’s in that very sensitive trouser pocket that sits just below the hip. The good ol’ hip pocket. Yes, slug the Americanos. This is way, way better than our cattlemen losing nearly AUD$420M a year due to tariffs.
I hear you ask, but why do they use so much North Queensland beef in their burgers?
It’s because 90pc of the cattle killed for consumption in America come out of feedlots. They are mud-fat from the grain, roughage and protein concentrates they are fed before being killed at an optimum weight of around 680kg. Fact is they need North Queensland’s super lean beef to water down all that fat.
North Queensland cattle, and north Australian cattle for that matter, are grass fed. Only a miniscule few go to feedlots. Being grassfed means they are lean, mean, fighting machines. Oh, and I forget to say “green”. Our beef is so green it gets high distinctions on the environmental score card. How can it not be green, raised out there as it is on the vast inland Mitchell Grass plains, the windswept, basalt tablelands north of Charters Towers and the forested eastern Gulf Country?
The Americans want and need our beef because of its leanness. They like to call our lean, largely Brahman-cross meat, grinding beef. They grind it down and mix it with the fat trimmed from their feedlot product.
Seven hundred thousand-plus Americans die each year from heart related diseases. If they didn’t add this lean, healthy Australian meat to their burgers and instead just made them from fatty feedlot beef, there’d hardly be anyone left standing in the Land of the Free, Home of the Brave.
Home Hill beef producer Don Heatley runs more than 8000 head of cattle. He’s chaired the Australian Meat and Livestock Corporation and the Commission for International Agricultural Research.
He admits it’s hard to keep up with the announcements and back flips coming out of America, but turmoil aside, he says Trump’s 10pc tariff will not impact North Queensland growers.
“The thing is that the 10pc will have to be absorbed by the US importer. This could mean US consumers will pay more for their burgers. It’s the natural cycle of a sale,” he said.
He says the American need our product because of its lean nature, but also because the American beef herd, due to long-running droughts, is the lowest in number than it’s been for decades.
The American consumers still want burgers and we have the lean beef to mix with their fatty trims from the feedlots,” he said.
And Mr Heatley said America has had foot and mouth and Mad Cow diseases in its herd. We don’t want their meat because with those two diseases on their Curriculum Vitae it’s too great a biosecurity threat. The truth is that with a history of diseases like those, clean, green, Australia wouldn’t touch US meat with a barge pole, a very long barge pole.
Donald Trump, being Donald Trump, says Australia won’t take US meat because it’s competition. Pull the other leg. It plays Randy Houser’s Whistlin’ Dixie (have a listen. It’ll brighten up your day).
And Mr Heatley applauds the Albanese government’s and the Dutton-led Opposition’s joint stance on not applying reciprocal tariffs on the US.
“What good is it putting 10pc tariff on Caterpillar graders and dozers from America? It only makes them dearer here in Australia,” he said.
Queensland National Party Senator Susan McDonald’s family runs 150,000 cattle on properties across northern Queensland. Senator McDonald’s beef industry credentials extend further. Before its sale in 2021 she ran the extended-south-east Queensland Super Butcher retail chain.
She says the 10pc tariff will have to be met by American consumers. She believes Australia will continue to enjoy good trading relations with the US and that whatever bouncers might be bowled in the way of tariffs or other economic forces, North Queensland’s cattlemen, livestock transporters and exporters will continue to bat them away towards the boundary.
Ms Castorina agrees with Don Heatly, that tit-for-tat tariffs and sanctions only hurt consumers.
“When one nation imposes trade barriers in the form of tariffs, sanctions and so on, it can lead to a tit-for-tat where the impacted nation does the same in retaliation. In this instance the Australian Government has stated that Australia will not tit-for-tat, citing it will hurts consumers,” she said.
She said Australia was versatile and able to adapt to changing conditions.
This was a sentiment shared by Senator McDonald who lauded the way the Australian industry could adapt to changing conditions.
“We can feel confident about that. If anyone is well positioned to deal with this it is the beef industry. It has proven time and time again that it is efficient, agile, innovative and responsive,” she said.
And finally, The Australian chapter of the global DED Head society can now consider itself formally disbanded.
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