US imports from Brazil continue
While all the major cattle and beef organizations called for a halt to imports of fresh beef from Brazil in February of this year after the country reported another BSE animal, USDA has not heeded those requests and fresh beef from that South American country continues to enter the US.
NCBA’s Todd Wilkinson, in a February TSLN interview, said US cattle producers can’t produce enough “grind” (low quality lean meat) to meet demand, and therefore this country must import some.
Some economists say that the exchange rate between countries often dictates the amount of beef or other products coming into this country.
Said USDA: Brazilian beef products continue to be attractive in the global market due to the devalued Brazilian currency, at an average of BRL 5.30 per dollar during 2022. With the new Brazilian government in place, financial institutions project the exchange rate to remain between BRL 5.1 and 5.3 per dollar throughout the year. Therefore, through 2023, Brazilian beef will continue being competitively priced in the global market.
Iowa State University’s Lee Schulz explained that the exchange rate discrepancy has been a factor since 2020.
“During the COVID-19 pandemic in 2020, the Brazilian currency (Real) depreciated by 25 percent to 30 percent and it has not recovered. As a consequence, Brazilian prices expressed in U.S. dollars are lower than they would have been had the value of the Real not depreciated relative to the U.S. dollar,” he said.
The United States has imported 956.5 million pounds of beef so far in 2023.
The United States has imported the most beef from Canada so far in 2023 followed by Brazil and Mexico.
U.S. beef imports from Canada are up nearly 8 percent from the same time frame, and beef imports from Brazil are down 12 percent so far in 2023. However, the US imported a record-breaking amount of fresh beef from Brazil in 2022. In January 2022 alone, imports reached nearly 100 million pounds—a more than 500 percent increase relative to the same month a year earlier—with fresh beef accounting for 83 million pounds, according to USDA.
According to USDA, record high U.S. beef prices and drought-impacted supplies in Australia, where the United States would otherwise source beef, have also contributed to growing imports of processing-grade beef from Brazil. Further, in September 2021, China—the destination for more than 40 percent of Brazilian beef exports in 2021—temporarily embargoed imports of Brazilian beef based on animal health concerns (the discovery – but slow reporting of – BSE in a Brazilian beef animal.)
Schulz explains how the exchange rate is also playing in Brazil’s favor when it comes to the beef market.
“A strong dollar will be a hurdle for beef exports in 2023, but as history has shown, it will not be a road block,” said Schulz in a Farm Progress story from January, 2023.
