Brazil's re-entry to the United States beef market will not shift the dial for Australia overnight, global beef market experts say.
With demand from China pushing the lean trimmings market up late last year and the prospect of lower exports out of Australia this year, it is understandable the US would look to re-grant Brazil's access, some said.
However, shipments are expected to start in small volumes.
And longer-term, Brazil's presence in the US will depend on many evolving factors, in particular affairs in China.
The US Government announced Brazil was re-approved to enter its beef market as of February 21.
The National Cattlemen's Beef Association in the US says it has serious concerns about the re-entry.
Senior director international trade and market access Kent Bacus said NCBA had frequently questioned the lack of scientific evidence that was used to justify Brazil's initial access to the US market in 2016.
"Unfortunately, we were not surprised when Brazil forfeited its beef access to the US in 2017 due to numerous food safety violations," he said.
Brazil was then required to undergo a thorough science-based inspection and audit process. The USDA now believes Brazil has addressed the concerns.
"Given Brazil's history of foot-and-mouth disease and its track record of repeated food safety violations at ports-of-entry, you can rest assured that NCBA will keep an eagle eye focus on all developments with Brazil and we expect nothing less than the highest level of scrutiny from USDA and customs officials," Mr Bacus said.
Meat & Livestock Australia market insights manager Tim Ryan said the US was a very important export market for Australian beef. It was Australia's third largest in 2019 and critical in balancing carcase trim and as a destination for lean cow beef, he said.
It has also evolved into a high value premium chilled grassfed beef market in recent years.
In 2019, Australia was the largest beef supplier outside North America to the US beef market, exporting 254,000 tonnes shipping weight, including 152,000 tonnes of manufacturing product and 63,000 tonnes of chilled grassfed primals, according to MLA data.
Mr Ryan said Brazil had a product that would fit within the US grinding market, however there were a few factors that may hold it back from becoming a leading player.
"Firstly, the Brazilian beef industry has become heavily geared to China, with shipments to the mainland and Hong Kong accounting for 46 per cent of exports in 2019 and as much as 62pc during the final quarter. One risk is that disruption to the China market from COVID-19 continues and becomes a longer-term issue - making the market less appealing for Brazilian beef," he said.
Secondly, without a Free Trade Agreement, Brazilian beef must access the US market within a shared 65,000t Most Favoured Nation quota.
Mr Ryan said Brazil would be fighting for quota primarily with Central American suppliers, notable Nicaragua and Costa Rica. However, with the Brazilian Real severely weakened, there could be scope for it to operate outside the quota and remain competitive even while incurring a 26.4pc tariff.
"A good test as to the US appetite of Brazilian beef may be Argentina, which gained 20,000 tonnes swt access per annum at the end of 2018 but shipped just 1,600 tonnes in 2019. This small volume, however, was recorded during a year in which China had an insatiable appetite for South American beef," he said.
Thirdly, Brazilian beef is yet to win consumer and commercial acceptance and given historical food safety scandals, many of the big US burger chains may be hesitant to use the product, Mr Ryan said.