Producers worry over Brazil beef
January 13, 2014
Producers of Brazilian beef anticipate a big boost in their sales to the U.S. as well as Canada and Mexico in the coming months, according to a local news story. It has some U.S. producers concerned.
"It is something spectacular to open a huge market such as the U.S. for Brazilian beef," said Antonio Carmadelli, president of the Brazilian Association of the Beef exporting industry, Abiec in a Dec., 20, Merco Press story. The U.S. is the world's largest consumer of beef, using 11.6 million tons annually of which 1.02 million tons are imported, said the story.
"Besides if we make it to the U.S we have prospects of other openings in NAFTA members, Canada and Mexico, plus Central America which follows U.S. sanitary rules," added the Brazilian businessman.
"Brasilia and Washington have taken the latest technical steps to open the U.S. market to Brazilian beef, which if all runs smoothly together with a 60 to 90 days public consultation period could see the first shipments in the second quarter of next year. Currently because of sanitary barriers linked to Foot and Mouth Disease, FMD, Brazil can only export industrialized beef to the U.S.," is the lead paragraph of the story from the 'South Atlantic News Agency.'
Over a year and a half ago, former Brazilian Ag minister Marcus Vinicius Pratini de Moraes opened discussions on a trade agreement with the U.S., but an outbreak of FMD (in neighboring Paraguay) forced a suspension of talks. Under the WTO cotton agreement reached in 2010, the U.S. was committed to opening its market for Brazilian pork and beef, the story went on to say.
The story claims that an agreement was reached in which 14 Brazilian states would be able to export fresh or (chilled) beef to the U.S. The idea was to make the official announcement last October but it all fell through with the disclosure of massive U.S. spying.
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Abiec estimates that in 2014 it will be able to sell anywhere from 5,000 to 10,000 tons of beef to the U.S., but 2015 could turn into a boom year.
Brazil is expected to export 6.5 bn dollars of beef this year with Hong Kong, Russia and Venezuela as main markets.
The story also states that the Brazilian government is confident that accessing the U.S. market will help them open up other significant markets such as Japan, South Korea, Taiwan and Indonesia.
The U.S. Federal Register, on Dec. 23, reqested comments on a proposal to allow 14 Brazilian states to export certain beef products as well as live cattle to the U.S.
The proposed rule estimates that Brazil will export between 20,000 and 60,000 metric tons of fresh (chilled or frozen) beef to the U.S. per year and that it would have a negative net impact on the U.S. cattle industry of $165 million annually.
"I don't think we need to be importing meat from these third world countries that don't have near the safety protocols that we have here in the U.S.," said Ft. Pierre Livestock's Bryan Hanson.
"Hoof and mouth is one of the most contagious diseases for a cloven footed animal," the R-CALF USA director said, commenting that the disease can even be spread through meat or even infected garbage. "I'm extremely nervous about them importing live cattle from a country that has this disease."
Hanson explained that currently one Brazilian state, Santa Catarina, has been approved by USDA to begin exporting both beef and live cattle to the U.S., but because their outdated packing plants have not yet been approved by a different USDA agency, product has not yet entered this county.
According to Hanson, 14 more Brazilian states are being considered for approval to export to the U.S., and he believes this would result in a flood of Brazilian beef and cattle crossing our borders."If South Dakota had a market where the cattle were worth $2 per pound and in North Dakota they were worth 25 cents a pound, you can bet they'd figure out a way to get their cattle down here and sell them as South Dakota cattle," he explained.
A few years ago Hanson read a study that stated that Brazilian cattle were valued at half the amount of U.S. cattle, and with the jump in the U.S. cattle market lately, he figures that spread has probably widened. He adds that cattle numbers in Brazil are approximately twice that of U.S. cattle numbers. The dumping situation that instigated lawsuits in the 1990s against Canadian cattle and beef will probably pale in comparison to the impact this agreement could have on the U.S. cattle market, he worries.
"It will break our market," he said. "I think you could see those fat cattle drop overnight because all of the Brazilan product would be captive supply that they could use to manipulate our market here. I wouldn't be surprised if we saw a drop in fat cattle of $100 to $200 per head this spring if it goes through."
Hanson explained that comments can be submitted by Feb. 21 to USDA Animal and Plan Health Inspection Service (APHIS) regarding the proposal to approve 14 more Brazilian states for importation of beef and cattle to the U.S.
Wall, S.D., rancher and cattle feeder Myron Williams said he is not very familiar with the details of the issue, and while he, in general is a "free trader," he isn't sure where APHIS is coming from in proposing the rule. "I don't understand some of their reasoning but if it's not a problem and if they can show the benefit in loosening some trade barriers somehwere else, I'm in favor of it. If it is just going to put more beef on the market here, I'd question the law," he said.
Ed Blair, Vale, S.D., seedstock producer and Past Chairman of the NCBA Joint International Markets Committee said, "Two concerns that I have with the importation of fresh Brazilian beef: 'Is the science right that you can remain FMD free and still import fresh meat?' I don't have an answer to that question as I am not a scientist. The second concern that I have is this: 'does FSIS have the personnel in this time of budget constraints to adequately inspect the Brazilian processing plants?'"
Comments can be submitted by Feb. 21, by either of the following methods:
Federal eRulemaking Portal: Go to http://www.regulations.gov/#!documentDetail;D=APHIS-2009-0017-0001.Postal Mail/Commercial Delivery: Send your comment to Docket No. APHIS–2009–0017, Regulatory Analysis, and Development, PPD, APHIS, Station 3A–03.8, 4700 River Road Unit 118, Riverdale, MD 20737–1238. F