The first transactions under the new Mercosur-European Union quota are beginning to take shape. An importer reported deals at US$ 12,000/t FOB from Uruguay and US$ 11,300/t FOB from Argentina for an 18-cut chilled grain-fed set. The quota is administered in quarterly windows on a first-come, first-served basis and is subject to a 7.5% tariff.
According to the source, the new quota is already beginning to compete directly with the 481 quota for grain-fed beef. The importer said the new scheme provides greater flexibility for feedlot production. Unlike the 481 quota, it does not require compliance with the 100-day grain-feeding protocol, simplifying feedlot operations and avoiding the heavy concentration of slaughter that resulted from the production windows under the 481 quota.
“We still have about a US$ 500/t premium for the 481 quota, which I believe reflects some producers' determination to preserve that differential, but it will gradually disappear,” he said. In his view, the new Mercosur quota will bring greater predictability to the feedlot business in Argentina and Uruguay.
