Opening the U.S. to Brazilian fresh and chilled beef begins
July 7, 2015
The United States has never imported fresh beef (chilled or frozen) from Brazil because the risk associated with foot and mouth disease (FMD) has been too great. FMD was eradicated in the U.S. in 1929 but still resides in many countries including Brazil. Beef imports from Brazil up to now have only included processed products, i.e. corned beef. From 1989 to 2014, imports of beef from Brazil have averaged 5 percent of total U.S. beef imports. During both 2006 and 2007, the figure jumped to 9 percent, while in 1991, it was less than half of 1 percent. In 2014, 3 percent of our total imported beef came from Brazil while from January through April of this year; imports of Brazilian beef are up 135 percent from a year ago and represent 5 percent of total U.S. beef imports.
On July 2, the Animal Plant and Health Inspection Service of USDA reversed the U.S.'s long-held trade policy and announced they are beginning the process of allowing certain states of Brazil to begin exporting fresh beef to the U.S. The approved states include Bahia, Distrito Federal, Espírito Santo, Goiás, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Paraná, Rio Grande do Sul, Rio de Janeiro, Rondônia, São Paulo, Sergipe, and Tocantins. As this process has moved along over the past two years, livestock producers have expressed great concern about the possibility of introducing FMD back into U.S. cattle and hog herds. This is a justifiable concern. FMD, unchecked is an economically devastating animal disease.
In response to industry concerns, USDA offers the assurance that "based on the evidence in a recent risk assessment, we have determined that fresh (chilled or frozen) beef can be safely imported from those Brazilian States provided certain conditions are met." These conditions include; 1) FMD has not been diagnosed in that region within the past 12 months, 2) there is no commingling of bovines or beef from that region with animals or beef from other regions prior to export, and 3) certain additional FMD-mitigation requirements, which include removal of bones and certain tissue and chilling of the carcasses until they reach a pH level of under 6.0, are met. Quoting from USDA's statement in the Final Rule in the Federal Register dated July 2, "we concluded that Brazil has the legal framework, animal health infrastructure, movement and border controls, diagnostic capabilities, surveillance programs, and emergency response capacity to prevent FMD outbreaks within the boundaries of the Brazilian export region and, in the unlikely event that one should occur, to detect, control, and eradicate the disease." I leave these quotes from USDA to your interpretation!
Aside from concerns about FMD, the other relevant questions are how much and when. It would seem that we are not likely to realize any additional imported beef resulting from this decision until the end of the year at the earliest and even more likely after the first of the year. USDA expects that imports from Brazil will average 40,000 metric tons per year (88.2 million lbs.). This quantity is about a 3 percent increase over 2014 total beef imports. I would expect the inflow of fresh beef from Brazil and Argentina under this "final rule" will coincide with an anticipated sharp slowdown in Australian beef imports following significant herd liquidation during their drought. This assumption is largely based on enough rain in the right places. We all know a little something about that!